Compute the overhead cost per unit for cutting shears using

Reference no: EM13588466

Wykle 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.

Activities

	Unit Level	Batch Level	Product Level	Facility Level
Cost	$52,500	$15,540	$15,000	$260,000
Cost driver	2,100 labor hrs.	37 setups	Percentage of use	13,000 units

Production of 890 sets of cutting shears, one of the company's 20 products, took 300 labor hours and 8 setups and consumed 19 percent of the product-sustaining activities.

b.	How much overhead is allocated to the cutting shears using activity-based costing? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Allocated cost

Compute the overhead cost per unit for cutting shears using first activity-based costing and then using direct labor hours for allocation if 890 units are produced. If direct product costs are $150 and the product is priced at 25 percent above cost, for what price would the product sell under each allocation system? (Round intermediate calculations to the nearest dollar amount and final answers to 2 decimal places. Omit the "$" sign in your response.)

	ABC	Labor Hrs
Allocated overhead	$	$
Direct cost

Total cost per unit
Desired profit

Sales price	$	$

Reference no: EM13588466

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