Vaulker 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: Cost Cost driver Unit Level $ 180,000 1,500 labor hrs. Activities Batch Level $40,000 40 setups Product Level $ 20,000 Percentage of use Facility Level $240,000 12,000 units Production of 800 sets of cutting shears, one of the company's 20 products, took 200 labor hours and 6 setups and consumed 15 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? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 800 units are produced. If direct product costs are $240 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. Req A and B Reac Had the company used labor hours as a companywide 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? a Alocated cost Alocated cost b Vaulker 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 Cost Cost driver Unit Level $ 180,000 1,5ee labor hrs. Activities Batch Level $40,000 40 setups Product Level $ 20,000 Percentage of use Facility Level $240,000 12,000 units Production of 800 sets of cutting shears, one of the company's 20 products, took 200 labor hours and 6 setups and consumed 15 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? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 800 units are produced. If direct product costs are $240 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. Req A and B Regc Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 800 units are produced. If direct product costs are $240 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.) Show less ABC Labor Hrs Allocated overhead Direct cost Total cost per unit Desired profit Sales price
