Normandy Office Products $(NOP)$ makes two types $of$ office desks, Manager and Executive. The Executive model $is$ adjustable using electric motors and $is$ made with upgraded materials. The manufacturing process for the Executive model $is$ more complex than that for the Manager model, requiring more frequent inspections and shorter production runs. The Manager model $is$ a basic desk, using good, but easy $to$ work with, materials, and $is$ simpler $to$ manufacture. NOP's results for the last fiscal year are shown $in$ the following statement.

NOP currently uses labor costs $to$ allocate all overhead, but management $is$ considering implementing $an$ activity$-$based costing system. After interviewing the sales and production staff, management decides $to$ allocate administrative costs $on$ the basis $of$ direct labor costs but $to$ use the following bases $to$ allocate the remaining costs: