Question :
Julio produces two kinds of calculator, standard and deluxe. The company is presently using a traditional costing system with machine hours as the cost driver but is considering a move to activity-based costing. In preparing for the possible switch, Julio has recognized two cost pools: materials handling and setup. The collected data follow:

                                                                 Standard Model                Deluxe Model

Number of machine hours:                           57,500                           60,000       

Number of material moves:                              580                                780           

Number of setup:s                                              120                               725             

Total estimated overhead costs are $503,250, of which $224,400 is assigned to the material handling cost pool and $278,850 is assigned to the setup cost pool.

Required :

1. Determine the overhead assigned to each product using the traditional cost system.

2. Evaluate the overhead assigned to each product using ABC