Grass Inc. identified the following overhead activities, their respective costs, and their cost drivers to produce...

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				Type of Mowers
	Activity (Cost)	Activity Costs	Cost Driver	Deluxe	Moderate	Economy	Total Cost Driver
	Machine maintenance ($545,600)	545600	Number of machine hours	220	780	1,200	2200
	Setups ($416,000)	416000	Number of setups	29	13	6	48
	Quality control ($203,322)	203322	Number of inspections	15	34	45	94
	Rent ($408,100)	408100	Number of square feet	420	180	110	710
		1573022


1	Total Overheads	1573022	A
	Total Machine Hours	2200	B
	Overhead Per MH	715.01	A/B

	Allocation of Overhead to Deluxe:
	Machine Hours	220	A
	Overhead Per MH	715	B

	Total Allocation	157302	A*B
	Total Units of Deluxe	500
	Overhead Per Unit	315


2	Activity Based System:
		A					B	A/B
	Activity (Cost)	Activity Costs	Cost Driver	Deluxe	Moderate	Economy	Total Cost Driver	Cost Per Driver
	Machine maintenance ($545,600)	545600	Number of machine hours	220	780	1,200	2200	248
	Setups ($416,000)	416000	Number of setups	29	13	6	48	8,667
	Quality control ($203,322)	203322	Number of inspections	15	34	45	94	2,163
	Rent ($408,100)	408100	Number of square feet	420	180	110	710	575
		1573022

		Economy		Economy
	Allocation of Overhead to Deluxe:	Cost Drivers	Cost Per Driver	Overhead Costs
	Machine maintenane	1,200	248	297600
	Setups	6	8,667	52000
	Quality control	45	2,163	97335
	Rent	110	575	63227
			Total	510162
			Total Units of Economy	1970
			Overhead Per Unit	258.97

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