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7.12, thank you! c. Which activity measure will customers prefer? Why? d. Is the number of tape mounts still a good cost driver for the

7.12, thank you!

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c. Which activity measure will customers prefer? Why? d. Is the number of tape mounts still a good cost driver for the data storage department? Why or why not? 7.12 (LO 3) Comparing product costs under traditional and activity-based costing Harrison- Brown is a book publisher that reissues old titles. The company offers these books with either a standard machine-glued hard cover or a deluxe, hand-embossed, hand-stitched, leather cover. Harrison-Brown cur- rently allocates overhead to the books based on direct labor hours. A recent activity analysis conducted by the controller revealed the following information. Standard Edition Deluxe Edition Units produced 500,000 8,000 Direct labor hours 550,000 30,000 Printing press hours 90,000 1,600 Sales orders 10,000 10,000 Required a. Calculate the following for each product: i. Direct labor hours per unit ii. Printing press hours per unit iii. Sales orders per unit b. What do your calculations above reveal about how standard edition books and deluxe edition books consume activities? c. If Harrison-Brown implements an activity-based costing system, what will likely happen to the cost of a standard edition book and a deluxe edition book? 7.13 (LO 3) Explaining the differences between traditional and activity-based product costs You're killing me!" exclaimed Myles Werntz, product manager for Premium products. "All along I've been told that the Premium line costs the company $125; we charge $225 and make a $100 profit. Now

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