Question

Smythe Co. makes furniture. The following data are taken from its production plans for the year.

Direct labor costs ……………………………………………………….. $5,870,000

Hazardous waste disposal costs …………………………………….. 630,000

Chairs Tables

Expected production ……………………………… 211,000 units 17,000 units

Direct labor hours required ……………………… 254,000 DLH 16,400 DLH

Hazardous waste disposed ……………………… 200 pounds 800 pounds

Required

1. Determine the hazardous waste disposal cost per unit for chairs and for tables if costs are assigned using a single plantwide overhead rate based on direct labor hours.

2. Determine hazardous waste disposal costs per unit for chairs and for tables if costs are assigned based on the number of pounds disposed of.

3. Which method is better for assigning costs to each product? Explain.

Short answer

Answer

Under the single plantwide method

Cost per unit for chairs:$2.8

Cost per unit for tables:$2.25

Under the ABC method

Cost per unit for chairs:$0.59

Cost per unit for tables: $29.65

Step-by-step solution

Under single plant wide method

$$\begin{gathered} \mathit{T}\mathit{o}\mathit{t}\mathit{a}\mathit{l}\mathbf{}\mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{a}\mathit{l}\mathbf{}\mathit{c}\mathit{o}\mathit{s}\mathit{t}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{C}\mathit{h}\mathit{a}\mathit{i}\mathit{r}\mathit{s}\mathbf{=}\frac{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{c}\mathbf{o}\mathbf{s}\mathbf{t}}{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{r}\mathbf{e}\mathbf{c}\mathbf{t}\mathbf{}\mathbf{l}\mathbf{a}\mathbf{b}\mathbf{o}\mathbf{r}\mathbf{}\mathbf{h}\mathbf{o}\mathbf{u}\mathbf{r}\mathbf{s}}\mathbf{\times }\mathit{D}\mathit{i}\mathit{r}\mathit{e}\mathit{c}\mathit{t}\mathbf{}\mathit{l}\mathit{a}\mathit{b}\mathit{o}\mathit{r}\mathbf{}\mathit{h}\mathit{o}\mathit{u}\mathit{r}\mathit{s}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{C}\mathit{h}\mathit{a}\mathit{i}\mathit{r} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\mathbf{\$}\mathbf{630}\mathbf{,}\mathbf{000}}{\mathbf{254}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{16}\mathbf{,}\mathbf{400}}\mathbf{\times }\mathbf{25}\mathbf{,}\mathbf{000} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{591}\mathbf{,}\mathbf{790} \end{gathered}$$

$$\begin{gathered} \mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{a}\mathit{l}\mathbf{}\mathit{c}\mathit{o}\mathit{s}\mathit{t}\mathbf{}\mathit{p}\mathit{e}\mathit{r}\mathbf{}\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{C}\mathit{h}\mathit{a}\mathit{i}\mathit{r}\mathit{s}\mathbf{=}\frac{\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{c}\mathbf{o}\mathbf{s}\mathbf{t}\mathbf{}\mathbf{a}\mathbf{s}\mathbf{s}\mathbf{i}\mathbf{g}\mathbf{n}\mathbf{e}\mathbf{d}\mathbf{}\mathbf{t}\mathbf{o}\mathbf{}\mathbf{C}\mathbf{h}\mathbf{a}\mathbf{i}\mathbf{r}\mathbf{s}}{\mathbf{E}\mathbf{x}\mathbf{p}\mathbf{e}\mathbf{c}\mathbf{t}\mathbf{e}\mathbf{d}\mathbf{}\mathbf{P}\mathbf{r}\mathbf{o}\mathbf{d}\mathbf{u}\mathbf{c}\mathbf{t}\mathbf{i}\mathbf{o}\mathbf{n}\mathbf{}\mathbf{o}\mathbf{f}\mathbf{}\mathbf{C}\mathbf{h}\mathbf{a}\mathbf{i}\mathbf{r}\mathbf{s}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\mathbf{\$}\mathbf{591}\mathbf{,}\mathbf{790}}{\mathbf{211}\mathbf{,}\mathbf{000}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{2}\mathbf{.}\mathbf{80} \end{gathered}$$

$$\begin{gathered} \mathit{T}\mathit{o}\mathit{t}\mathit{a}\mathit{l}\mathbf{}\mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{a}\mathit{l}\mathbf{}\mathit{c}\mathit{o}\mathit{s}\mathit{t}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{T}\mathit{a}\mathit{b}\mathit{l}\mathit{e}\mathit{s}\mathbf{=}\frac{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{c}\mathbf{o}\mathbf{s}\mathbf{t}}{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{r}\mathbf{e}\mathbf{c}\mathbf{t}\mathbf{}\mathbf{l}\mathbf{a}\mathbf{b}\mathbf{o}\mathbf{r}\mathbf{}\mathbf{h}\mathbf{o}\mathbf{u}\mathbf{r}\mathbf{s}}\mathbf{\times }\mathit{D}\mathit{i}\mathit{r}\mathit{e}\mathit{c}\mathit{t}\mathbf{}\mathit{l}\mathit{a}\mathit{b}\mathit{o}\mathit{r}\mathbf{}\mathit{h}\mathit{o}\mathit{u}\mathit{r}\mathit{s}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{T}\mathit{a}\mathit{b}\mathit{l}\mathit{e}\mathit{s} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\mathbf{\$}\mathbf{630}\mathbf{,}\mathbf{00}}{\mathbf{254}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{16}\mathbf{,}\mathbf{400}}\mathbf{\times }\mathbf{16}\mathbf{,}\mathbf{400} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{38}\mathbf{,}\mathbf{210} \end{gathered}$$

$$\begin{gathered} \mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{a}\mathit{l}\mathbf{}\mathit{c}\mathit{o}\mathit{s}\mathit{t}\mathbf{}\mathit{p}\mathit{e}\mathit{r}\mathbf{}\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{T}\mathit{a}\mathit{b}\mathit{l}\mathit{e}\mathit{s}\mathbf{=}\frac{\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{c}\mathbf{o}\mathbf{s}\mathbf{t}\mathbf{}\mathbf{a}\mathbf{s}\mathbf{s}\mathbf{i}\mathbf{g}\mathbf{n}\mathbf{e}\mathbf{d}\mathbf{}\mathbf{t}\mathbf{o}\mathbf{}\mathbf{T}\mathbf{a}\mathbf{b}\mathbf{l}\mathbf{e}\mathbf{s}}{\mathbf{E}\mathbf{x}\mathbf{p}\mathbf{e}\mathbf{t}\mathbf{e}\mathbf{d}\mathbf{}\mathbf{P}\mathbf{r}\mathbf{o}\mathbf{d}\mathbf{u}\mathbf{c}\mathbf{t}\mathbf{i}\mathbf{o}\mathbf{n}\mathbf{}\mathbf{o}\mathbf{f}\mathbf{}\mathbf{T}\mathbf{a}\mathbf{b}\mathbf{l}\mathbf{e}\mathbf{s}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\mathbf{\$}\mathbf{38}\mathbf{,}\mathbf{210}}{\mathbf{17}\mathbf{,}\mathbf{000}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{2}\mathbf{.}\mathbf{25} \end{gathered}$$

Under ABC method

$$\begin{gathered} \mathit{T}\mathit{o}\mathit{t}\mathit{a}\mathit{l}\mathbf{}\mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{a}\mathit{l}\mathbf{}\mathit{c}\mathit{o}\mathit{s}\mathit{t}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{C}\mathit{h}\mathit{a}\mathit{i}\mathit{r}\mathit{s}\mathbf{=}\frac{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{c}\mathbf{o}\mathbf{s}\mathbf{t}}{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{e}\mathbf{d}}\mathbf{\times }\mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{e}\mathit{d}\mathbf{}\mathit{b}\mathit{y}\mathbf{}\mathit{C}\mathit{h}\mathit{a}\mathit{i}\mathit{r}\mathit{s} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\mathbf{\$}\mathbf{630}\mathbf{,}\mathbf{000}}{\mathbf{200}\mathbf{+}\mathbf{800}}\mathbf{\times }\mathbf{200} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{126}\mathbf{,}\mathbf{000} \end{gathered}$$

$$\begin{gathered} \mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{a}\mathit{l}\mathbf{}\mathit{c}\mathit{o}\mathit{s}\mathit{t}\mathbf{}\mathit{p}\mathit{e}\mathit{r}\mathbf{}\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{C}\mathit{h}\mathit{a}\mathit{i}\mathit{r}\mathit{s}\mathbf{=}\frac{\mathbf{H}\mathbf{w}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{c}\mathbf{o}\mathbf{s}\mathbf{t}\mathbf{}\mathbf{a}\mathbf{s}\mathbf{s}\mathbf{i}\mathbf{g}\mathbf{n}\mathbf{e}\mathbf{s}\mathbf{}\mathbf{t}\mathbf{o}\mathbf{}\mathbf{C}\mathbf{h}\mathbf{a}\mathbf{i}\mathbf{r}\mathbf{s}}{\mathbf{E}\mathbf{x}\mathbf{p}\mathbf{e}\mathbf{c}\mathbf{t}\mathbf{e}\mathbf{d}\mathbf{}\mathbf{P}\mathbf{r}\mathbf{o}\mathbf{d}\mathbf{u}\mathbf{c}\mathbf{t}\mathbf{i}\mathbf{o}\mathbf{n}\mathbf{}\mathbf{o}\mathbf{f}\mathbf{}\mathbf{C}\mathbf{h}\mathbf{a}\mathbf{i}\mathbf{r}\mathbf{s}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\mathbf{\$}\mathbf{126}\mathbf{,}\mathbf{000}}{\mathbf{211}\mathbf{,}\mathbf{000}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{0}\mathbf{.}\mathbf{59} \end{gathered}$$

localid="1662386891835" $$\begin{gathered} \mathit{T}\mathit{o}\mathit{t}\mathit{a}\mathit{l}\mathbf{}\mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{a}\mathit{l}\mathbf{}\mathit{c}\mathit{o}\mathit{s}\mathit{t}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{T}\mathit{a}\mathit{b}\mathit{l}\mathit{e}\mathit{s}\mathbf{=}\frac{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{c}\mathbf{o}\mathbf{s}\mathbf{t}}{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{e}\mathbf{d}}\mathbf{\times }\mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{e}\mathit{d}\mathbf{}\mathit{b}\mathit{y}\mathbf{}\mathit{T}\mathit{a}\mathit{b}\mathit{l}\mathit{e}\mathit{s} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\mathbf{\$}\mathbf{630}\mathbf{,}\mathbf{000}}{\mathbf{200}\mathbf{+}\mathbf{800}}\mathbf{\times }\mathbf{800} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{504}\mathbf{,}\mathbf{000} \end{gathered}$$

$$\begin{gathered} \mathit{H}\mathit{W}\mathbf{}\mathit{d}\mathit{i}\mathit{s}\mathit{p}\mathit{o}\mathit{s}\mathit{a}\mathit{l}\mathbf{}\mathit{c}\mathit{o}\mathit{s}\mathit{t}\mathbf{}\mathit{p}\mathit{e}\mathit{r}\mathbf{}\mathit{f}\mathit{o}\mathit{r}\mathbf{}\mathit{T}\mathit{a}\mathit{b}\mathit{l}\mathit{e}\mathit{s}\mathbf{=}\frac{\mathbf{H}\mathbf{W}\mathbf{}\mathbf{d}\mathbf{i}\mathbf{s}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{c}\mathbf{o}\mathbf{s}\mathbf{t}\mathbf{}\mathbf{a}\mathbf{s}\mathbf{s}\mathbf{i}\mathbf{g}\mathbf{n}\mathbf{e}\mathbf{d}\mathbf{}\mathbf{t}\mathbf{o}\mathbf{}\mathbf{T}\mathbf{a}\mathbf{b}\mathbf{l}\mathbf{e}\mathbf{s}}{\mathbf{E}\mathbf{x}\mathbf{p}\mathbf{e}\mathbf{c}\mathbf{t}\mathbf{e}\mathbf{d}\mathbf{}\mathbf{P}\mathbf{r}\mathbf{o}\mathbf{d}\mathbf{u}\mathbf{c}\mathbf{t}\mathbf{i}\mathbf{o}\mathbf{n}\mathbf{}\mathbf{o}\mathbf{f}\mathbf{}\mathbf{T}\mathbf{a}\mathbf{b}\mathbf{l}\mathbf{e}\mathbf{s}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\mathbf{\$}\mathbf{504}\mathbf{,}\mathbf{000}}{\mathbf{17}\mathbf{,}\mathbf{000}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{29}\mathbf{.}\mathbf{65} \end{gathered}$$

Comparison of methods

Based on the above analysis, ABC costing method is most appropriate for assigning overhead costs. The reason is that in the ABC method the overheads are assigned based on the activity level for that overhead cost.

In the given case, the hazardous waste is more for the table than the chairs. So logically the table should bear more hazardous waste costs than chairs. ABC method provides this solution and in the given case the tables have been allocated more overhead costs than chairs under ABC allocation.

In the single plantwide rate, the overheads have been allocated unjustly based on direct labor hours which is not associated with the hazardous waste activity.