Question: Jasper Co. manufacturers two products, A & B. Jasper Co.'s overhead costs consist of setting up machines, $800,000; machining, $1,800,000, and inspecting, $600,000. See more info below about the products:
A. B.
Direct labor hours 15,000 25,000
Machine setups 600 400
Machine hours 24,000 26,000
Inspections 800 700
Q1. How much overhead is applied to A using traditional cost using direct labor hours?
Q2. How much overhead is applied to B using activity-based costing?