Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year: Cost Pools Budgeted Cost Cost Driver Cost Driver Level Setup $ 40,000 Number of setups 200 Ordering 20,000 Number of orders 1,000 Maintenance 50,000 Machine hours 5,000 Power 10,000 Kilowatt hours 10,000 Total direct labor hours budgeted= 2,000 hours. The following data applies to Product X, one of the products completed during the year Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours Kilowatt hours $1,000 $1,200 100 40 4 8 50 100
Required:
a. If a volume-based costing system based on direct labor hours to assign overhead is used, the total overhead cost for Product X will be:
b. If the activity-based cost drivers are used to allocate overhead cost, the total overhead cost of Product X will be:.