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Victory Lawn Mowers manufacture two models: the 'Standard' and the 'Enviro'. The factory...

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Victory Lawn Mowers manufacture two models: the 'Standard' and the 'Enviro'. The factory currently utilises a factory-wide overhead allocation rate based on Direct Labour Hours with budgeted overhead for the year of $6,000,000. Budgeted production of mowers is 540,000 Standard model and 120,000 Enviro model. The business is considering adopting an Activity-Based Costing approach to overhead allocation and the budgeted usage and cost of each activity is detailed below. OH Activity OH Cost Cost Driver Set Ups Laser Cutter Machining Assembly Packing $700,000 $600,000 $1,800,000 $1,400,000 $1,500,000 Number of Set ups Machine Hours Machine Hours Labour Hours Number of Orders Amount of Cost Driver Standard Enviro 40 80 40,000 10,000 50,000 35,000 30,000 10,000 100 400 Using the ABC method of allocating costs, calculate the combined amount of overhead allocated to the Standard mower for its Laser Cutting and Machining activities (round answer to nearest $1)

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