Serial Problem Business Solutions

After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey wondered if it was time to critically analyze overhead costs at Business Solutions. In a recent month, Rey found that setup costs, inspection costs, and utility costs made up most of its overhead. Additional information about overhead follows.

Activity		Cost	Driver
Setting up machines	$	14,200	20	batches
Inspecting components	$	4,900	4,900	parts
Providing utilities	$	9,800	4,900	machine hours

Overhead has been applied to output at a rate of 60% of direct labor costs. The following data pertain to Job 6.15.

Direct materials	$	2,800
Direct labor	$	4,000
Batches		7	batches
Number of parts		460	parts
Machine hours		570	machine hours

Required:

1.	Classify each of its three overhead activities as unit level, batch level, product level, or facility level.

Setting up machines	Batch level, Unit level or Facility level?
Inspecting components	Facility level, Unit level or Batch level
Providing utilities	Unit level, Batch level or Facility level

2.	What is the total cost of Job 6.15 if Business Solutions applies overhead at 60% of direct labor cost?(Omit the "$" sign in your response.)

Total cost???

$

3.	What is the total cost of Job 6.15 if Business Solutions uses activity-based costing? (Omit the "$" sign in your response.

Total cost?????

$