Exercise 5-8A (Algo) Allocating costs with different cost drivers LO 5-1, 5-2, 5-3 Adams 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 Activities Batch Level $ 24,000 $ 14,570 1,000 labor hours 31 setups Product Level $ 12,000 Percentage of use Facility Level $ 240,000 15,000 units Production of 860 sets of cutting shears, one of the company's 20 products, took 180 labor hours and 6 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? 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 860 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? Complete this question by entering your answers in the tabs below. Req A and B Reg C 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? Note: Round intermediate calculations to 2 decimal places. Round your final answers to the nearest whole dollar amount. a. Allocated cost b. Allocated cost Complete this question by entering your answers in the tabs below. Req A and B Req C Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 860 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? Note: Round intermediate calculations and final answers to 2 decimal places. ABC Labor Hours Allocated overhead Direct cost Total cost per unit Desired profit Sales price Show less