Smythe Co. makes furniture. The following data are taken from its production plans for the year.

Direct labor costs	$	5,590,000
Hazardous waste disposal costs		625,000

	Chairs		Tables
Expected production	201,000	units	18,000	units
Direct labor hours required	258,000	DLH	15,800	DLH
Hazardous waste disposed	500	pounds	500	pounds

Required:

1. Determine the hazardous waste disposal cost per unit for chairs and for tables if costs are assigned using a single plantwide overhead rate based on direct labor hours.
			per direct labor hour
Product	Activity Driver	OH $ per direct labor hour	Total Overhead Cost	Units Produced	OH Cost per unit
Chairs
Tables
2. Determine hazardous waste disposal costs per unit for chairs and for tables if costs are assigned based on the number of pounds disposed of.
Product	Activity Driver	OH $ per pound	Total Overhead Cost	Units Produced	OH Cost per unit
Chairs
Tables

3. Which method is better for assigning costs to each product?

• Assignment based on the number of pounds

• Assignment based on direct labor hours