Smythe Crystal makes fine tableware in its Ireland factory. The following data are taken from its production plans for the year.

Direct labor costs			5,760,000
Setup costs			620,000

	Wine Glasses				Commemorative Vases
Expected production		210,000	units			12,000	units
Direct labor hours required		262,000	DLH			15,400	DLH
Machine setups required		400	setups			800	setups

1. Determine the setup cost per unit for the wine glasses and for the commemorative vases if setup costs are assigned using a single plantwide overhead rate based on direct labor hours.
Product	Activity Driver	Overhead Rate	Total Overhead Cost	Units Produced	OH Cost per unit
Wine Glasses
Vases
2. Determine setup costs per unit for the wine glasses and for the commemorative vases if the setup costs are assigned based on the number of setups.
Product	Activity Driver	Overhead Rate	Total Overhead Cost	Units Produced	OH Cost per unit
Wine Glasses
Vases

3.

Which method is better for assigning costs to each product?

	Assignment based on the number of setups
	Assignment based on direct labor hours