Finch 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: Cost Cost driver Unit Level $ 44,000 2,000 labor hours Activities Batch Level $ 16,920 36 setups Product Level $ 19,000 Percentage of use Facility Level $ 192,000 12,000 units Production of 730 sets of cutting shears, one of the company's 20 products, took 230 labor hours and 9 setups and consumed 13 percent of the product-sustaining activities. 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 730 units are produced. If direct product costs are $190 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system?

Finch 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: Production of 730 sets of cutting shears, one of the company's 20 products, took 230 labor hours and 9 setups and consumed 13 percent of the product-sustaining activities. 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 730 units are produced. If direct product costs are $190 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system