Swartz publishing identified the following overhead

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Swartz Publishing identified the following overhead activities, their respective costs, and their cost drivers to produce the three types of textbooks the company publishes.



Type of Textbook



  Activity (Cost) Cost Driver Deluxe Moderate Economy
  Machine maintenance ($259,600)   Number of machine hours 260
710
1,230
  Setups ($489,500)   Number of setups 23
12
8
  Packing ($126,100)   Number of cartons 11
30
56
  Photo development ($324,000)   Number of pictures 4,100
1,900
1,200

Deluxe textbooks are made with the finest-quality paper, six-color printing, and many photographs. Moderate texts are made with three colors and a few photographs spread throughout each chapter. Economy books are printed in black and white and include pictures only in chapter openings.

Required:
a.

Swartz currently allocates all overhead costs based on machine hours. The company produced the following number of books during the prior year.

Deluxe Moderate Economy
42,000 158,000 196,000


Determine the overhead cost per book for each book type. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)


Deluxe Moderate Economy
  Cost per book $     $     $   

b.

Determine the overhead cost per book, assuming that the volume-based allocation system described in Requirement a is replaced with an activity-based costing system. (Round your answers to 2 decimal places.Omit the "$" sign in your response.)


Deluxe Moderate Economy
  Cost per book $     $     $   

Reference no: EM13588464

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