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Snazy Chairs (a specialised chair manufacturer) had identified the following overhead activities, costs and activity drivers at the beginning of the year: Activity Expected Cost

Snazy Chairs (a specialised chair manufacturer) had identified the following overhead activities,

costs and activity drivers at the beginning of the year:

Activity Expected Cost Activity Driver Activity Capacity

Setup Costs $60,000 Number of setups 300

Ordering costs $45,000 Number of orders 4,500

Machine costs $90,000 Machine hours 18,000

Receiving costs 25,000 Number of parts 50,000

$220,000

Assume for simplicity that each activity corresponds to a process. The following two jobs were recently completed:

Comfort Chairs Plush chairs

Direct materials (per batch) $750 $850

Direct labour (50 hours per

batch) $600 $600

Units in each batch 10 5

Number of setups 1 1

Number of orders 4 2

Machine hours 20 30

Parts used 20 40

One measure of the company

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