1. Tesla and Ford Motor Company allocate their manufacturing overhead costs using activity-based costing. The following table summarizes the costs and cost drivers:

Activity	Tesla Total Cost ($)	Cost Driver	Cost Driver Quantity	Ford Total Cost ($)
Setup	$900,000	Number of setups	900 setups	$800,000
Machining	$1,800,000	Machine hours	70,000 hours	$1,600,000
Quality Control	$1,200,000	Number of inspections	12,000 inspections	$1,000,000
Total	$3,900,000			$3,400,000

• Tesla produced 700,000 vehicles, and Ford Motor Company produced 800,000 vehicles during the year.
• Allocate manufacturing overhead costs per vehicle for Tesla and Ford using activity-based costing.
• Discuss how differences in setup costs impact Tesla's and Ford's manufacturing efficiency and cost structure.