Exercise 5-8A Allocating costs with different cost drivers LO 5-1, 5-2, 5-3 Vaulker Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing The costs and cost drivers associated with the four overhead activity cost pools follow Activities Facility L evel Product Level 5 20,880 Percentage of use it Level Cost Cost driver 5 188,000 1,500 labor hes. Batch Level $40,000 40 setups $240,000 12,000 units Production of 800 sets of cutting shears, one of the company's 20 products, took 200 labor hours and 6 setups and consumed 15 percent of the product-sustaining activitios Required a. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 800 units are produced. If direct product costs are $240 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system