(answered) - Spiro Company produces commercial gardening equipment. Since
Paper Details
| Spiro 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. |
| ?Accounting |
| ? | Activities | ? | ||||
| ? | ? | |||||
| ? | ? | Unit Level | Batch Level | Product Level | Facility Level | ? |
| ? | Cost | $90,000????? | $20,000??? | $10,000???????? | $120,000 ???? | ? |
| ? | Cost driver | 1,500 labor hrs. | 40?setups | Percentage of use | 12,000?units | ? |
| ?????Production of 800 sets of cutting shears, one of the company?s 20 products, took 200 labor hours and 6 setups and consumed 15?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? |
| ? | ? |
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| c. | Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 800 units are produced. If direct product costs are $120 and the product is priced at 30 percent above cost, for what price would the product sell under each allocation system??(Round intermediate calculations?and final answers to 2 decimal places.) |
| ? | ? |
| ? |
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This question was answered on: 10 May, 2025
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