Spiro 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.

	Activities
		Unit Level	Batch Level	Product Level	Facility Level
	Cost	$33,600	$20,580	$12,000	$170,000
	Cost driver	1,200 labor hrs.	49 setups	Percentage of use	10,000 units

Production of 720 sets of cutting shears, one of the companys 20 products, took 120 labor hours and 5 setups and consumed 17 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? (Round intermediate calculations to 2 decimal places andfinal answer to the nearest dollar amount.)

Allocated cost

b.

How much overhead is allocated to the cutting shears using activity-based costing? (Round your answer to the nearest dollar amount.)

Allocated cost

c.

Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 720 units are produced. If direct product costs are $140 and the product is priced at 30 percent above cost, for what price would the product sell under each allocation system? (Round intermediate calculations and final answers to 2 decimal places.)

	ABC	Labor Hrs
Allocated overhead
Direct cost
Total cost per unit	0.00	0.00
Desired profit
Sales price	$0.00	$0.00