All Wood Corporation manufactures dining chairs and tables. The following information is available:

Activity Volume Total Activity

Dining ChairsTables Cost

Machine setups 50 75 $9,000

Inspections 300 190 $7,590

Labour hours 700 300

All Wood is considering switching from one overhead rate based on labour hours to activity-based costing.

Required:

Perform the following analyses of overhead for these two products:

a)Calculate total machine setups and inspection costs assigned to each product, using a single overhead rate (Labour Hours). (2 Marks)

b)Calculate total machine setups and inspection costs assigned to each product, using activity-based costing.(2 Marks)

c)Comment on your findings. (1Mark)