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The job costing system at Sheris Custom Framing has five indirect-cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The company is in the process of bidding on two jobs: Job 215, an order of 15 intricate personalized frames, and Job 325, an order of 6 standard personalized frames. The controller wants you to compare overhead allocated under the current simple job-costing system and a newly designed activity-based job-costing system. Total budgeted costs in each indirect-cost pool and the budgeted quantity of activity driver are as follows:

	Budgeted Overhead	Activity Driver	Budgeted Quantity of Activity Driver
Purchasing	$35,000	Purchase orders processed	2,000
Material handling	43,750	Material moves	5,000
Machine maintenance	118,650	Machine-hours	10,500
Product inspection	9,450	Inspections	1,200
Packaging	19,950	Units produced	3,800
	$226,800

Information related to Job 215 and Job 325 follows. Job 215 incurs more batch-level costs because it uses more types of materials that need to be purchased, moved, and inspected relative to Job 325.

	Job 215	Job 325
Number of purchase orders	25	8
Number of material moves	10	4
Machine-hours	40	60
Number of inspections	9	3
Units produced	15	6

Required:

1. Compute the total overhead allocated to each job under a simple costing system, where overhead is allocated based on machine-hours.
2. Compute the total overhead allocated to each job under an activity-based costing system using the appropriate activity drivers.
3. Explain the main differences between traditional job costing system and activity based costing system.

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