Exercise 5-5B Understanding the context-sensitive nature of classifying activities Canton Company makes two types of cell phones. Handy is a thin, pocket-size cell phone that is easy to carry around. Action is a palm-size phone convenient to hold while the user is talking. During its most recent accounting period, Canton incurred $270,000 of quality-control costs. Recently Canton established an activity-based costing system, which involved classifying its activities into four categories. The categories and appropriate cost drivers follow. Canton uses direct labor hours to allocate unit-level activities, number of batches to allocate batch-level activities, number of engineers to allocate product-level activities, and number of square feet to allocate facility-level activities. Required Allocate the quality-control cost between the two products, assuming that it is driven by (a) unit-level activities, (b) batch-level activities, (c) product-level activities, and (d) facility-level activities. Note that each allocation represents a separate allocation. In other words, the $270,000 of quality-control costs will be allocated four times, once for each cost driver. Exercise 5-5B Understanding the context-sensitive nature of classifying activities Canton Company makes two types of cell phones. Handy is a thin, pocket-size cell phone that is easy to carry around. Action is a palm-size phone convenient to hold while the user is talking. During its most recent accounting period, Canton incurred $270,000 of quality-control costs. Recently Canton established an activity-based costing system, which involved classifying its activities into four categories. The categories and appropriate cost drivers follow. Canton uses direct labor hours to allocate unit-level activities, number of batches to allocate batch-level activities, number of engineers to allocate product-level activities, and number of square feet to allocate facility-level activities. Required Allocate the quality-control cost between the two products, assuming that it is driven by (a) unit-level activities, (b) batch-level activities, (c) product-level activities, and (d) facility-level activities. Note that each allocation represents a separate allocation. In other words, the $270,000 of quality-control costs will be allocated four times, once for each cost driver