REQUIRED:

Allocate the inspection costs to each department, and compute the overhead cost per unit for each monitor. $($Overhead rates use direct labor hours.$)$

Compute the overhead cost per unit if manufacturing cells are created. Which unit overhead cost do you think is more accurate$$the one computed with a departmental structure, or the one computed using a cell structure? Explain.

Note that the total overhead costs for the cell structure are lower. Explain why.