Exercise 5-9A Allocating costs with different cost drivers LO 5-2, 5-3

Wallace 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 ($264,000)	Number of machine hours	260		740		1,200
Setups ($424,000)	Number of setups	25		14		6
Packing ($144,000)	Number of cartons	12		29		55
Photo development ($390,000)	Number of pictures	4,100		1,800		1,300

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.	Wallace 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	148,000	197,000

	Determine the overhead cost per book for each book type.(Round intermediate calculations and finalanswers to 2 decimal places.)

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.)

How do I do part b?