180 Company has a factory with the following characteristics for the week: direct labor of direct materials of Mixed overhead of variable overhead of unils produced, and shipments made 8200 7400 12400 17000 1200 One of its products is LO6. LOS used hours of labor. The factory made units of LC8 at a materials cost of Ser Unit. LO6 also requires shipments. On average, labor costs are per hour For this question, assume there is one cost oocl with direct materials as the allocation base. How much overhead cost is allocated to L067 (round to whole number of S) Answer: Now assume that there are two cost pools. Cost pool 1 includes fixed overhead and uses shipments as the allocation base. Cost pool 2 includes variable overhead and uses direct labor as the allocation base. How much total overhead is allocated to LQ6? (round to whole number of $ Answer: One of the two cost allocation amounts calculated above is larger than the other. What is the best explanation for the difference in results for the two cast allocation systems? il. Production of LOG is very shipments intensive relative to other products made in the laclory, b. Direct materia s is not a good choice for alocation base since it isn't the cost driver c. More cost pools means each pool has less in it and thus less overhead gets allocated. o al d. Production of LO6 is very materials intensive relative to other products made in the factory. Production of LQ6 is very labor intensive relative to other products made in the factory. e