Refer to the facts as shown in E5-14. The cost system designers at Hasgrow selected the numObj. 4 ber of setups as a cost driver to allocate setup costs to products. As an alternative, they could allocate setup costs to batches based on the number of setup hours for each changeover.

a. What assumption did the cost system designers make when they chose number of setups rather than number of setup hours to allocate machine setup costs?

b. Which alternative might result in easier (and perhaps less costly) data collection?