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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:

Activities
	Unit Level		Batch Level		Product Level	Facility Level
Cost	$ 29,000		$ 23,760		$ 17,000	$ 180,000
Cost driver	1,000	labor hours	44	setups	Percentage of use	18,000	units

Production of 850 sets of cutting shears, one of the companys 20 products, took 140 labor hours and 9 setups and consumed 11 percent of the product-sustaining activities.

Required

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?

Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 850 units are produced. If direct product costs are $190 and the product is priced at 25 percent above cost for what price would the product sell under each allocation system?

Req A and B

Req 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

Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 850 units are produced. If direct product costs are $190 and the product is priced at 25 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.

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	ABC Labor Hours Allocated overhead Direct cost Total cost per unit 0.00 0.00 Desired profit Sales price $0.00 $0.00

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