All Wood Corporation manufactures dining chairs and tables. The following information is available:

All Wood is considering switching from one overhead rate based on labor hours to activity-based costing.

Instructions

Perform the following analyses for these two components of overhead:

a. Compute total machine setups and inspection costs assigned to each product, using a single overhead rate.

b. Compute total machine setups and inspection costs assigned to each product, using activity-based costing.

c. Comment on your findings.

Transcribed Image Text:

Dining Chairs Tables 200 Total Cost Machine setups Inspections Labor hours 600 $32,000 250 500 $54,000 2,600 2,400