Grass Inc. identified the following overhead activities, theirrespective costs, and their cost drivers to produce the three typesof lawn mowerss
| | Type of Mowers |
| | |
Activity (Cost) | Cost Driver | Deluxe | Moderate | Economy |
Machine maintenance ($545,600) | Number of machine hours | 220 | | 780 | | 1,200 | |
Setups ($416,000) | Number of setups | 29 | | 13 | | 6 | |
Quality control ($203,322) | Number of inspections | 15 | | 34 | | 45 | |
Rent ($408,100) | Number of square feet | 420 | | 180 | | 110 | |
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The company produced the following number of lawn mowers duringthe prior year.
Deluxe | Moderate | Economy |
500 | 1,440 | 1,970 |
|
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1. Grass Inc. currently allocates all overhead costs based onmachine hours. Determine the overhead cost per mower for the deluxetype. (choose the closest number).
2. Determine the overhead cost for one unit of economy mower,assuming that Grass Inc. uses an activity-based costing system.(choose the closest number)
