Eric Parker 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 $999,470 is based on 46,500 machine hours. In an initial analysis of overhead costs, Eric Parker has identified the following activity cost pools.

Cost Pool Expected Cost Expected Activities
Product assembly $427,800 46,500 Machine hours
Machine setup and calibration 343,750 2,750 setups
Product inspection 123,500 1,300 batches
Raw materials storage 104,420 454,000 pounds
$999,470
Eric Parker 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.

Driver Usage Component 3F5 ComponentT76
Machine hours 1,280 9,600
Setups 40 20
Batches 15 10
Pounds of raw materials 10,000 10,000
(a) Calculate the total overhead allocated to each component under the traditional method using machine hours as the overhead application base.

(b) Calculate the total overhead allocated to each component under activity-based costing.