The following overhead cost information is available for the Bright LCD Corporation, a manufacturer of computer monitors:

During the year, 1,000 purchase orders were issued; 300 shipments of material were received; 600 machine setups occurred; and 750 inspections were conducted. Employees worked a total of 10,000 direct labor hours on assembly of the monitors. The corporate managers are trying to decide whether they should use a traditional overhead allocation method based on direct labor (assembly) hours, or switch to an activity-based costing system. Assume that a batch of 200 monitors has resulted in the following cost activity:
Purchase orders ........... 7
Shipments of material received .....12
Machine setups ........... 2
Direct labor assembly hours ......50
Inspections .............. 3
A. Determine the overhead allocation for the batch of 200 monitors under the traditional overhead allocation based on direct labor hours.
B. Determine the overhead allocation for the batch under activity-basedcosting.

Activity Purchasin Receiving Machine setups Assembly Quality control Allocation Base Number of purchase orders Number of shipments of material Number of setups Direct labor hours Number of inspections Overhead Cost $400,000 100,000 300,000 125,000 75,000