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Scissors, Inc. is a manufacturer of scissors. The company has always used a plantwide rate for allocating manufacturing overhead to its products. The plant manager
Scissors, Inc. is a manufacturer of scissors. The company has always used a plantwide rate for allocating manufacturing overhead to its products. The plant manager believes that it is time to consider a change and the accounting department has been able to establish some new relationships between production activities and the manufacturing overhead. They are as follows: Activity Materials handling Assembly Inspection Cost Driver Number of parts Labor hours Minutes Rate $5.00 $22.00 $13.00 The traditional method is based upon labor hours and has a rate of $360 per labor hour. Scissors produces their products in batches of 200 scissors. Each batch requires 230 parts, 18 labor hours and 8 minutes of inspection time. The cost of a pair of scissors if traditional costing is used is closest to (round total costs to zero decimal places and unit costs to two decimal places) O $3240 $8.25 O $72.000 $6,480 O $1.650
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