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Rooney Company produces commercial gardening equlpment. Since production Is highly automated, the company allocates ts overhead costs to product lines using activlty-based costing. The costs
Rooney Company produces commercial gardening equlpment. Since production Is highly automated, the company allocates ts overhead costs to product lines using activlty-based costing. The costs and cost drivers assoclated wlth the four overhead activity cost pools follow: Activities Cost Cost driver Unit Level $ 23,108 1,189 labor hrs Batch Level $19,740 47 setups $14,e80 Percentage of use Facility Level $132,800 12,880 units Production of 810 sets of cutting shears, one of the company's 20 products, took 160 labor hours and 7 setups and consumed 15 percent of the product-sustalning activties. Required a. Had the company used labor hours as a company wide 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 unlt for cutting shears first using activity-based costing and then using direct labor hours for allocation if 810 units are produced. If direct product costs are $180 and the product Is priced at 30 percent above cost for what price would the product sell under each allocation system? Complete this question by entering your answers in the tabs below. Required ARequired C and B Had the company used labor hours as a c ide allocation base, how much overhead would it have allocated to the cutting shears? How much overhead is allocated to the cutting shears using activity-based costing? (Round intermediate calculations to 2 decimal places. Round your final answers to the nearest whole dollar amount.) a. Allocated cost b.Allocated cost
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