Exercise $5-8$A $($Algo$)$ Allocating costs with different cost drivers LO $5-1,5-2,5-3$

Finch 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:

Production of $730$ sets of cutting shears, one of the company's $20$ products, took $210$ labor hours and $8$ setups and consumed $16$

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 $730$ 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?