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Sound Company produces several lines of headphones. The factory is highly automated and uses an activity-based costing system to allocate overhead costs to its various
Sound Company produces several lines of headphones. The factory is highly automated and uses an activity-based costing system to allocate overhead costs to its various products. During the upcoming period, the company expects to produce 72,000 units. The costs and cost dri associated with four activity cost pools are given below: UNIT BATCH PRODUCT FACILITY ACTIVITIES: LEVEL LEVEL LEVEL LEVEL Cost $30,000 $8,000 $15,000 $36,000 10,000 250 set 72,000 Cost driver % of use labor hrs ups units Production of 18,000 units of its popular in-ear headphones required 2,200 labor hours and 80 setups and consumed one-fourth of the product sustaining activities. What amount of unit-level costs will be allocated to the product? $3,750 $6,600 $2,560 $7,500 $9,000
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