QUESTION 9 (Not a repeat QUES'IOI'L) Guess Klein produces designer clothing such as TvShlS and Jeans from tabnc purchased from several nearby faclon'es The company's factory has two departments. Cutting and Sewing, The Cutting department, which cuts the garments from patterns, is a machine-intensive operation It takes three times longer to cut and sew ieans compared to T-shin's The Sewing department stitches the cut labnc, saws zippers and buttons and does quality checking. While stitching Is highly automated, sewing zippers and buttons and perfon'nlng quality checks is manual. The company has decided to redo their accounting system and move to an activity based oust system. Table 1 shows the ve activity cost pools which include all of the company's direct labor and manufacturing ovelhead costs It also shows the cost drivers for each pool Table 2 shows the oost drivers consumed by the two products Table 3 shows budgeted product dala for Jeans and Tshlrls cost Driver $56,000 Machine hours 276.000l Number or cuts 212,000 Number or sides Labornours Check/Move Goods Number 01 moves Total Tahle 2: Guess Klein Activity Cost Drivers Total Machine Hours Number of cuts per garment Number of sides per garment Table 3: Budgeted Product Data for Guess Klein Garments Direct Materials Direct Labor (Allocated on garments produced) Machine Hours The amount of activity "Maintain Equipment" allor'ated to Jeans is, 0 $56,000 0 $42,000 0 $14,000 0 $0.34