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After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey wondered if it was time to critically analyze

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After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey wondered if it was time to critically analyze overhead costs at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of its overhead. Additional information about overhead follows. Driver 25 batches Activity Setting up machines Inspecting components Providing utilities Cost $20,e00 $ 7,500 $10,e0e 5,080 parts 5,000 machine hours Overhead has been applied to output at a rate of 50% of direct labor costs. The following data pertain to Job 615. Direct materials Direct labor $2,500 $3,500 Batches 2 batches Number of parts 400 parts 600 machine hours Machine hours Required: 1. Classify each of its three overhead activities as unit level, batch level, product level, or facility level. Setting up machines Inspecting components Providing utilities search PTOVIang ummes ed 2. What is the total cost of Job 615 if Business Solutions applies overhead at 50% of direct labor cost? Total cost 3. What is the total cost of Job 615 if Business Solutions uses activity-based costing? Total manufacturing cost

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