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Blackwell Tools produces a variety of tools at its Tulsa manufacturing plant. The plant is highly automated and uses an activity-based costing system to allocate
Blackwell Tools produces a variety of tools at its Tulsa manufacturing plant. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to its various product lines. The company expects to produce 24,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below: ACTIVITIES: UNIT LEVEL BATCH LEVEL PRODUCT LEVEL FACILITY LEVEL Cost $75,000 $10,000 $150,000 Cost Driver 3,000 labor hrs 100 set ups % of use 24,000 units Production of 1,000 units of a specialized wrench set required 300 labor hours and 10 setups, consumed 40% of the product sustaining activities, and resulted in an overhead allocation of $21,000. What amount of batch-level overhead cost is allocated to the 1,000 units in total? $3,250 $17,750 $32,500 $7,000 None of these answers is correct
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