Reference no: EM131115612

Activity-Based Costing: The Pinaforie Company used the following four cost pools in calculation overhead allocations for its Osowhatso Production during December:

Activity Cost Pool	Activity Measure	Activity Rate
Set-Up Costs	Batches Run	$1,200 per batch
Depreciation	Machine Hours	$10 per machine hour
Electric Costs	Kilowatt Hours	$20 per kilowatt hour
Quality Control	Inspection hours	$40 per inspection hour

December production resulted in 12,400 Osowhatso's produced.  It took 9,500 hours of machine time, requiring 200 batches of production, 3,000 kilowatt hours of electricity were used and 1,600 hours of inspection time were required for quality control.

Required:

Compute the overhead cost for its Osowhatso Production during December using activity-based costing methods.

Compute the overhead cost for its Osowhatso Production during December if they just used one cost rate (the "traditional method").  The single-based cost allocation would be based on estimated total overhead costs of $450,000 and a rate based on machine hours, which were estimated to be 9,000 machine hours.