Activity (Cost) Machine maintenance ($360,000) Setups ($630,000) Packing ($162,000) Photo development ($504,000) Deluxe Moderate 50,000 150,000 Cost Driver Number of machine hours Number of setups Number of cartons Number of pictures Economy 200,000 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; a Cost per book (volume-based allocation) b. Cost per book (activity-based costing) Answer is complete but not entirely correct. Deluxe Deluxe 300 30 10 4,000 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. Note: For all requirements, round your answers to 2 decimal places. 3.85 14.28 Moderate $ S Type of Textbook Moderate 900 15 30 2,000 Economy 1,200 5 50 1,000 Economy 3.85 2040S 3.850 1.900
Activity (Cost) Machine maintenance ($360,000) Setups ($630,000) Packing ($162,000) Photo development ($504,000) Deluxe Moderate 50,000 150,000 Cost Driver Number of machine hours Number of setups Number of cartons Number of pictures Economy 200,000 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; a Cost per book (volume-based allocation) b. Cost per book (activity-based costing) Answer is complete but not entirely correct. Deluxe Deluxe 300 30 10 4,000 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. Note: For all requirements, round your answers to 2 decimal places. 3.85 14.28 Moderate $ S Type of Textbook Moderate 900 15 30 2,000 Economy 1,200 5 50 1,000 Economy 3.85 2040S 3.850 1.900
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
answer in text form please (without image)
Transcribed Image Text:3
2014037
Activity (Cost)
Machine maintenance ($360,000)
Setups ($630,000)
Packing ($162,000)
Photo development ($504,000)
Cost Driver
Number of machine hours
Number of setups
Number of cartons
Number of pictures i
Deluxe
300
30
10.
4,000
a Cost per book (volume-based allocation)
b. Cost per book (activity-based costing)
Answer is complete but not entirely correct.
Deluxe
Moderate
Type of Textbook
Moderate
900
Deluxe textbooks are made with the finest-quality paper, six-color printing, and many photographs. Moderate texts are made with
three colors and a few photographs spread throughout each chapter. Economy books are printed in black and white and include
pictures only in chapter openings.
15
30
2,000
Required
a. Sheridan currently allocates all overhead costs based on machine hours. The company produced the following number of books
during the prior year,
Deluxe Moderate
50,000
Econony
200,000
150,000
Determine the overhead cost per book for each book type.
b. Determine the overhead cost per book, assuming that the volume-based allocation system described in Requirement a is replaced
with an activity-based costing system.
Note: For all requirements, round your answers to 2 decimal places.
3.85$
3.85 0
14.28 $ 204 S
Economy
1,200
Economy
5
50
1,000
3.85
1.03
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