Problem I Switzer, Inc., which sells books to college bookstores and individuals, uses activitybased costing and activitybased management. The following information is available for the company's three cost pools: Percent of Cost Percent of Cost Cost Driver Activity for Driver Activity Driver Bookstore for Transactions Activig: Cost Driver Quangi Transactions to Individuals Incoming receipts Number of purchase orders 3,000 20% 80% Number of Warehousing inventory moves 8,000 60 40 Outgoing Number of shipments shipments 13.000 30 70 Bookstore sales totaled P0400000 and sales to individuals amounted to P2,400000. Costs for the three activities were: Incoming receipts, P450000; warehousing, P520000; and outgoing shipments, P630000. A review of the company's activities found various inefficiencies with respect to the warehousing of textbooks (acquired for eventual sale to bookstores) and outgoing shipments to individuals. These inefficiencies resulted in an extra 500 moves and 400 shipments, respectively. 1. How much did nonvalueadded activities cost Switzer this past year? Problem 11 Waupaca Company produces three products with the following production and cost information: Model A Model B Model C Units produced 2,000 6,000 12,000 Direct labor hours (total) 4,000 2,000 4,000 Number of setups 100 1 50 2 50 Number of shipments 200 225 275 Engineering change orders 1 5 10 5 Overhead costs include setups P90000; shipping costs P140000; and engineering costs P180000. .2. What would be the per unit overhead costfor Model A ifdirect labor hours were the allocation base