Swartz publishing identified the following overhead

Reference no: EM13588464

Swartz Publishing identified the following overhead activities, their respective costs, and their cost drivers to produce the three types of textbooks the company publishes.

		Type of Textbook

Activity (Cost)	Cost Driver	Deluxe	Moderate	Economy
Machine maintenance ($259,600)	Number of machine hours	260	710	1,230
Setups ($489,500)	Number of setups	23	12	8
Packing ($126,100)	Number of cartons	11	30	56
Photo development ($324,000)	Number of pictures	4,100	1,900	1,200

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.	Swartz currently allocates all overhead costs based on machine hours. The company produced the following number of books during the prior year.

Deluxe	Moderate	Economy
42,000	158,000	196,000

Determine the overhead cost per book for each book type. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

	Deluxe	Moderate	Economy
Cost per book	$	$	$

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. (Round your answers to 2 decimal places.Omit the "$" sign in your response.)

	Deluxe	Moderate	Economy
Cost per book	$	$	$

Reference no: EM13588464

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