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3 33.34 points WI Refe re n ces Exercise 5-9A (Static) Allocating costs with different cost drivers L0 52, 5-3 Sheridan Publishing identified the following
3 33.34 points WI Refe re n ces Exercise 5-9A (Static) Allocating costs with different cost drivers L0 52, 5-3 Sheridan 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 ($360,000) Number of machine hours 300 900 1,200 Setups ($630,000) Number of setups 30 15 5 Packing ($162,000) Number of cartons 10 30 50 Photo development ($504,000) Number of pictures 4,000 2,000 1,000 [ Deluxe textbooks are made with the finestquality paper, sixcolor 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: Deluxe Moderate Economy 50, 000 150,000 200,000 Determine the overhead cost per book for each book type. b. Determine the overhead cost per book, assuming that the volumebased allocation system described in Requirement a is replaced with an activitybased costing system. (For all requirements, round your answers to 2 decimal places.) a Cost per book (volume-based allocation) - - - Cost per book (activity-based costing)
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