| Observations | Setup Costs | # of Setups | Purch Costs | # of POs | Labor Costs | DLH | Total Costs |
| | | 2,000 | | 200 | | 125 | 209.45 |
| | Material costs for each tire: | | | Tires Produced |
| | A105 | 40 | | 15,000 |
| | B107 | 70 | | 5,000 |
| | Activities used by products A and B: |
| | | # of Setups | # of POs | DLH |
| | A105 | 30 | 80 | 10,000 |
| | B107 | 120 | 220 | 6,000 |
| Part 1: | Traditional Cost Allocation to Products A and B: |
| | | # of Setups | # of POs | DLH | Materials | Total | TC per Tire |
| | A105 | | | 2,094,500 | 600,000 | 2,694,500 | 179.63 |
| | B107 | | | 1,256,700 | 350,000 | 1,606,700 | 321.34 |
| Part 2: | ABC Allocation to Products A and B: |
| | | # of Setups | # of POs | DLH | Materials | Total | TC per Tire |
| | A105 | 60,000 | 16,000 | 1,250,000 | 600,000 | 1,926,000 | 128.40 |
| | B107 | 240,000 | 44,000 | 750,000 | 350,000 | 1,384,000 | 276.80 |