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Assign overhead costs using traditional costing and ABC, compare results. gns and builds factory-made premium wooden onents (spindles, risers, hangers, hand rails) per- All are of white oak wood. Budgeted manu- c. Are management's future plans for the two models sound? Explain. P17.3A (LO 1,2). AN Writing Shaver Stairs Co designs and builds factor stairways for homes. The manufactured stairway co mit installation of stairways of varying lengths and widths. All are of white o facturing overhead costs for the year 2022 are as follows. Amount Overhead Cost Pools Purchasing $ 75,000 Handling materials 82,000 Production (cutting, milling, finishing) 210.000 Setting up machines 105,000 Inspecting 90,000 Inventory control (raw materials and finished goods) 126,000 180,000 Total budgeted overhead costs $868,000 Utilities For the last 4 years, Shaker Stairs Co has been chargint overhead to products on the basis of ma chine hours. For the year 2022, 100,000 machine hours are budgeted. Jeremy Nolan, owner-manager of Shaker Stairs Co. recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan's request, Bill and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools. Estimated Use of Activity Cost Pools Cost Driver's Cost Drivers 000 Number of orders Purchasing 8,000 Nurher of moves Handling maturals Production autung, miting, intshing) Diret labor hours 100,000 Setting prines Nucer of setups 1,250 Number of inspections 6,000 Fuspecting Inven ontoruwmaterials Number of components 168,000 and finished goods) Square feet occupied 90,000 Utilities Problems: Set A 17-43 Steve Hannon, sales manager, has reo Inc., a large housing development contra components for 250 stairways so Steve can manager, has received an order for 250 stairways from Community Builders, opment contractor At Steve's request. Bill prepares cost estimates for producing Ways so Steve can submit a contract price per stairway to Community Builders He accumulates the following data for the production of 250 stairs $103.600 $112,000 14,500 5,000 Direct materials Direct labor Machine bours Direct labor hours Number of purchase orders Number of material moves Number of machine setups Number of inspections Number of components Number of square feet occupied SOO 100 450 16,000 8.000 Instructions a. Compute the predetermined overhead made using traditional costing with machine hours as the basis. b. Cost/stairway $1,365.84 c. Cost/Stairway $1,139.80 0. what is the manufacturing cost per stairway under traditional costing? (Round to the nearest cent.) c. What is the manufacturing cost per stairway under the promour activity based costing? (Round to the nearest cent. Prepare all of the necessary schedules.) d. Which of the two costing systems is preferable in pricing decisions and why