Sheridan Publishing identified the following overhead activities, their respective costs, and their cost drivers to produce the three types of textbooks the company publishes. Type of Textbook Activity (Cost) Machine maintenance ($360,000) Number of machine hours Setups ($630,ooo) Packing ($162,000) Photo development ($504.000) Number of pictures Cost Driver Deluxe Moderate Economy 300 30 10 4,000 900 15 30 2,000 1,200 5 50 1,000 Number of setups Number of cartons Deluxe textbooks are made with the finest-quality paper, six-color printing, and many photographs. Moderate texts are made with three colors and a few photographs spread throughout each chapter. Economy books are printed in black and white and include pictures only in chapter openings. Required a. Sheridan currently allocates all overhead costs based on machine hours. The Page 232 company produced the following number of books during the prior year: Deluxe Moderate Economy 50,000150,000 200,00O Determine the overhead cost per book for each book type. Determine the overhead cost per book, assuming that the volume-based allocation system described in Requirement a is replaced with an activity-based costing system. Round your figures to two decimal points Explain why the per-unit overhead costs determined in Requirements a and b differ. b. e. 2 a. Overhead Application rate: Overhead Costs: Deluxe Moderate Economy Total 9 M. Hours (a) | | | | Allocation (ax b = c) 12 Units (d) 1 13 Cost/Unit (cld 14 15 Rates DriverDeluxeModerateEconomy Total 17 18 Machine Hours 19 | |# Setups 201 1# cartons 211 1#Pictures Base Rat -Rates Cost 24 Machine Hours 25 | |# Setups 26 | | # Cartons 27 | It Pictures 28 Deluxe ModerateEconomy 30 Machine Hours 31 Rate 32 Allocation 33 | # Setups 34 Rate 35 Allocation 36 | # Cartons 37 Rate 38 Allocation 39 | # Pictures 40 Rate 41 Allocation 42 Total 43 Units 44 Cost/Unit 45 46 c