University, Inc. uses a volume-based costing system that applies overhead cost based on set ups at...

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University, Inc. uses a volume-based costing system that applies overhead cost based on set ups at $1,000 per set up. The company is considering adopting an activity-based costing system with the following data: Activity. Purchasing Cost Driver Purchase orders Receiving Shipment received Machine setups Number of setups Quality control Inspections Rate $5.00 4.00 60.00 7.00 The two jobs processed in the month of May had the following characteristics: Job A Job B Direct material Direct labor $12,000 $60,000 $6,000 $12,000 Purchase orders 900 3,000 Shipments received 450 1,500 Number of setups 10 30 Number of units in each job 400 1,200 *All units inspected Problem 3.3 The difference in total cost between ABC and the volume-based costing system for Job B is: $200 $970 $300 O $1,200 University, Inc. uses a volume-based costing system that applies overhead cost based on set ups at $1,000 per set up. The company is considering adopting an activity-based costing system with the following data: Activity. Purchasing Cost Driver Purchase orders Receiving Shipment received Machine setups Number of setups Quality control Inspections Rate $5.00 4.00 60.00 7.00 The two jobs processed in the month of May had the following characteristics: Job A Job B Direct material Direct labor $12,000 $60,000 $6,000 $12,000 Purchase orders 900 3,000 Shipments received 450 1,500 Number of setups 10 30 Number of units in each job 400 1,200 *All units inspected Problem 3.3 The difference in total cost between ABC and the volume-based costing system for Job B is: $200 $970 $300 O $1,200