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Sarah Lawrence-Smith manufactures dining chairs and tables. The following information is available: Dining Tables Total Chairs Cost Machine 100 300 $48,000 setups Inspections 125 235
Sarah Lawrence-Smith manufactures dining chairs and tables. The following information is available: Dining Tables Total Chairs Cost Machine 100 300 $48,000 setups Inspections 125 235 $72,000 Labor 2,600 2,400 5,000 hours hours Sarah Lawrence-Smith 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 machine sets and inspections: (a) Compute total machine setups and inspection costs assigned to each product using a single overhead rate. 15 points (b) Compute total machine setups and inspection costs assigned to each product using ACTIVITY-BASED COSTING 15 points (c) Comment on your findings. +6 points
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