Batch-level allocations: Count and Duration drivers (LO2). Sanford and Sons inform you that for the coming year, they expect to spend $1,248,000 on costs related to setups. They also inform you that...

Batch-level allocations: Count and Duration drivers (LO2). Sanford and Sons inform you that for the coming year, they expect to spend $1,248,000 on costs related to setups. They also inform you that they anticipate a volume of 600 setups. Of these, 400 will be “minor” changeovers, averaging 35 minutes each; the remaining 150 setups are “major changeovers” that average 1 hour each.

Required:

a. Determine cost per setup using the number of setups as the cost driver.

b. Determine the cost per minor and major setups using the number of setup minutes as the driver.