Activity-Based CostingComprehensive Problem Riverdale Printing Company is the publisher for many of the local newspapers and magazines. They publish nine periodicals and several other types of literature, including handouts and pamphlets. They have recently adopted an activity-based costing system to assign manufacturing overhead to products. The following data relate to one of their products, The Riverdale Weekly, and the ABC cost pools:

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PROBLEM 6-15. Activity-Based Costing-Comprehensive Problem Riverdale Printing Company is the publisher for many of the local newspapers and magazines. They publish nine periodicals and several other types of literature, including handouts and pamphlets. They have recently adopted an activity-based costing system to assign manufacturing overhead to products. The following data relate to one of their prod- ucts, The Riverdale Weekly, and the ABC cost pools: The Riverdale Weekly: Annual production 20,000 units Direct material per unit $31 Direct labor per unit $6 Manufacturing overhead cost pools: Cost Driver Number of purchase orders Number of receiving reports Number of setups Number of inspections Direct labor cost Cost Pool Cost Materials ordering $800,000 Materials inspection 400,000 Equipment setup 2,000,000 Quality control 900,000 Other 15,000,000 Total mfg. overhead $19,100,000 Annual activity information related to cost drivers: Cost Pool All Products Materials ordering 100,000 orders Materials inspection 2,000 receiving reports Equipment setup 100 setups Quality control 4,000 inspections Other $10,000,000 direct labor The Riverdale Weekly 1,000 300 1 400 $120,000 Required a. Calculate the overhead rate per unit of activity for each of the five cost pools. b. Calculate the total overhead assigned to the production of The Riverdale Weekly. c. Calculate the overhead cost per unit for The Riverdale Weekly. d. Calculate the total unit cost for The Riverdale Weekly. e. Suppose that Riverdale Printing allocates overhead by a traditional production vol- ume-based method using direct labor dollars as the allocation base and one cost pool. Determine the overhead rate per direct labor dollar and the per unit overhead as- signed to The Riverdale Weekly. Discuss the difference in cost allocations between the traditional method and the activity-based costing approach