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Activity (Cost) Machine maintenance ($360, 000) Setups ($640,000) Packing (168,000) Photo development ($680,000) Type of Textbook Deluxe Moderate Economy 900 15 35 Cost Driver Number
Activity (Cost) Machine maintenance ($360, 000) Setups ($640,000) Packing (168,000) Photo development ($680,000) Type of Textbook Deluxe Moderate Economy 900 15 35 Cost Driver Number of machine hours Number of setups Number of cartons Number of pictures 300 30 15 4,500 1,200 2,500 1,500 Deluxe textbooks are made with the finest-quality paper, six-color 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 60,000 Moderate 180,000 Economy 240,000 Determine the overhead cost per book for each book type b. Determine the overhead cost per book, assuming that the volume-based allocation system described in Requirement a is replaced with an activity-based costing systemm
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