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Problem
Scott Tools produces a variety of scissors and other cutting instruments at its Statesboro manufacturing plant. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to its various product lines. The company expects to produce 30,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below:
ACTIVITIES:
UNIT
BATCH
PRODUCT
FACILITY
LEVEL
Cost
$70,000
?
$23,000
$240,000
Cost Driver
5,000 labor hrs
120 set ups
% of use
30,000 units
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