Evert Company makes two types of circuit boards. One is a high-caliber board designed to accomplish the most demanding tasks; the other is a low-caliber board designed to provide limited service at an affordable price. During its most recent accounting period, Evert incurred $540,000 of inspection cost. Evert recently established an activity-based costing system that classifies its activities into four categories. Categories and appropriate cost drivers follow:

Required
Allocate the inspection cost between the two products assuming that it is driven by
(a) unit-level activities,
(b) batch-level activities,
(c) product-level activities,
(d) facility-level activities.
Note that each allocation represents a separate alternative. In other words, the $540,000 of inspection cost will be allocated four times, once for each cost driver.

Transcribed Image Text:

Direct Labor Hours Number of Batches Number of Inspectors High caliber Low caliber Total 6,000 21,000 27,000 20 20 40 Number of Square Feet 30,000 70,000 100,000