PART A and B

Brian Lee has been studying his department's profitability reports for the past six months. He has just completed a managerial accounting course and is beginning to question the company's approach to allocating overhead to products based on machine hours. The current department overhead budget of $977,310 is based on 32,577 machine hours. In an initial analysis of overhead costs, Brian has identified the following activity cost pools. Expected Activities Expected Cost $484.000 44,000 machine hours Cost Pool Product assembly Machine setup and calibration Product inspection Raw materials storage 372,600 5,400 Setups 70,560 1.440 batches 50,150 295,000 pounds $ 977.310 Brian Lee is taking the next step in his exploration of activity based costing and wants to examine the overhead costs that would be allocated to two of the department's four products. He has gathered the following budget information about each product Component 3F5 Component 176 Driver Usage Machine hours 1.180 10.100 41 22 Setups 15 10 Batches 10,000 10,000 Pounds of raw materials (a) Calculate the total overhead allocated to each component under the traditional method using machine hours as the overhead application base Component 3F5 Component T76 $ Total Overhead allocated (b) Calculate the total overhead allocated to each compongnt under activity-based costing (Round overhead rotes to 2 decimal places, es. 5.27 and round final answers to decimal places, eg,5,275.) Component 3F5 Component 176 $ Total Overhead allocated