1. Toyota and Honda allocate their manufacturing overhead costs using activity-based costing. The following table summarizes the costs and cost drivers:

Activity	Toyota Total Cost ($)	Cost Driver	Cost Driver Quantity	Honda Total Cost ($)
Setup	$500,000	Number of setups	800 setups	$400,000
Machining	$1,000,000	Machine hours	50,000 hours	$900,000
Quality Control	$600,000	Number of inspections	5,000 inspections	$500,000
Total	$2,100,000			$1,800,000

• Toyota produced 600,000 vehicles, and Honda produced 700,000 vehicles during the year.
• Allocate manufacturing overhead costs per vehicle for Toyota and Honda using activity-based costing.
• Discuss how differences in setup costs impact Toyota's and Honda's manufacturing efficiency and cost structure.