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(Solved): Activity (Cost) Machine Maintenance ($360,000) Setups ($700,000) Packing ($180,000) Photo Developmen ...

Activity (Cost) Machine maintenance ($360,000) Setups ($700,000) Packing ($180,000) Photo development ($660,800) Cost Driver

Activity (Cost) Machine maintenance ($360,000) Setups ($700,000) Packing ($180,000) Photo development ($660,800) Cost Driver Number of machine hours Number of setups Number of cartons Number of pictures Type of Textbook Deluxe Moderate Economy 360 1,080 1,440 20 15 30 50 5,600 3,600 2,600 35 10 Deluxe textbooks are made with the finest-quality paper, six-color printing, and many photographs. Moderate texts are made with three colors and a few photographs spread throughout each chapter. Economy books are printed in black and white and include pictures only in chapter openings. Required a. Sheridan currently allocates all overhead costs based on machine hours. The company produced the following number of books during the prior year: Deluxe 60,000 Moderate 180,000 Economy 240,000 Determine the overhead cost per book for each book type. b. Determine the overhead cost per book, assuming that the volume-based allocation system described in Requirement a is replaced with an activity-based costing system. Economy (For all requirements, round your answers to 2 decimal places.) Deluxe Moderate a. Cost per book (volume-based allocation) b. Cost per book (activity-based costing)

Expert Answer

part-a Computation of Overhead Cost per Unit- Deluxe Text books Deluxe Moderate Economy No. of Machine Hour (a) 360 1080 1440 Perdermined Overhead per Machine Hour (b) 660 660 660 Applied Overhea
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