Valpar Company produces several lines of laundry hampers. 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 drivers associated with four activity cost pools are given below:

Production of 20,000 units of its popular foldable hamper required 3,000 labor hours, 75 setups, and consumed one-third of the product sustaining activities. What amount of unit-level costs will be allocated to the product?

a) $5,000

b) $2,500

c) $7,500

d) $6,000

Transcribed Image Text:

ACTIVITIES: cost Cost driver UNIT LEVEL $ 30,000 12,000 labor hrs BATCH LEVEL $ 8,000 200 setups PRODUCT LEVEL $ 15,000 % of use FACILITY LEVEL $ 36,000 72,000 units ACTIVITIES: cost Cost driver UNIT LEVEL $ 30,000 12,000 labor hrs BATCH LEVEL $ 8,000 200 setups PRODUCT LEVEL $ 15,000 % of use FACILITY LEVEL $ 36,000 72,000 units

Answer rating: 100% (QA)

Unit le... View the full answer