Fog Lifter Coffee Roasting Company of Benicia, California roasts two unique blends of coffee beans: Fog Lifter and Midnight Oil. These unique blends are sold and shipped exclusively to CPA firms and Law firms across the country.

Fog Lifter Midnight Oil

Signature Blend Tax Season Blend Total Cost Roasting Machine Setups 600 150 $36,000

Roasting Inspections 300 75 $12,000

Labor hours 4,250 1,400

The company is considering switching from one overhead rate based on labor hours to activity-based costing.

Instructions

Perform the following analyses for these two components of overhead:

1. Compute total roasting machine setups and roasting inspection costs assigned to each product, using a single overhead rate.

2. Compute total machine setups and inspection costs assigned to each product, using activity-based costing.

3. Comment on your findings.

please explain for me thank you