Part A

Box Springs, Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $$35$ per unit and $$55$ is used in direct labor, while the direct material for the king is $$55$ per unit, and the labor cost is $$70$ per unit. Box Springs estimates it will make $4,300$ queens and $3,000$ kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows:

Activity Cost Pools Driver Estimated Overhead Use per Queen Use per King

Framing Square feet of pine $$150,0004,5003,000$

Padding Square feet of quilting $156,00080,00040,000$

Filling Square feet of filling $210,000150,00060,000$

Labeling Number of boxes $190,00038,00038,000$

Inspection Number of inspections $180,000120,00060,000$

How much does each unit cost to manufacture?

Part B

Hayward Industries manufactures dining chairs and tables. The following information is available:

Dining Chairs Tables Total Cost

Machine setups $200600$ $$48,000$

Inspections $250470$ $$72,000$

Labor hours $2,6002,400$

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

Perform the following analyses for these two components of overhead:

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

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

Comment on your findings.