Kelso Manufacturing allocates manufacturing overhead using a single predetermined rate based on a planned use of $15,000$ direct labour hours per year. Company leadership recently learned that its costing system may be too simple for its operations, and that job costs may be fairly inaccurate. A consultant was hired to study overhead costs, and the following information reflects the cost pools and activity rates that were determined:

Cost Pool

Total Cost

Activity Rate

Purchasing

$$90,000$

$$30/$purchase order

Assembly

$$150,000$

$$10/$direct labour hour

Inspection

$$60,000$

$$15/$inspection

Production

$$150,000$

$$3/$unit produced

Total

$$450,000$

Job #$500$ produced $250$ units of product and required $6$ purchase orders, $80$ direct labour hours, $3$ inspections. The cost of allocated overhead using a traditional job$-$costing system is $\_\_\_\_\_\_\_\_\_,$ and $\_\_\_\_\_\_\_\_\_\_$ using an activity$-$based costing system.

Question $9$Answer

a$.$

$$1,025$; $$1600$

b$.$

$$1,025$; $$800$

c$.$

$$800$; $$980$

d$.$

$$2,400$; $$1,775$