Auto-Plex produces windshields for a major international automobile manufacturer. The company is under increasing pressure to reduce costs. Thus, management authorized an activitybased costing study to help understand how various activities contribute to overhead costs. The following is an excerpt from the ABC study:

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A. Using Exhibit 7 as a model, construct a diagram of a two-stage cost allocation system for Auto-Plex.
B. Identify each activity pool in your model as unit level, batch level, product level, or facility level.

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Cost Pool Glass melting oven Machine setup Special inspection Supervision Explanation Silica (sand) is melted in a continuous flow, resulting in glass sheets used by all windshield types. The major cost is the natural gas consumed on an hourly basis. Windshield molding machines must be reconfigured between runs of different products. Radio antennas are molded into certain types of windshields. These specialty windshields require extra handling and inspection activities. Each shift employs three supervisors who support all manufacturing processes and products within the plant.