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:
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ACTIVITIES:
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UNIT
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BATCH
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PRODUCT
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FACILITY
|
|
LEVEL
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LEVEL
|
LEVEL
|
LEVEL
|
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Cost
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$70,000
|
?
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$23,000
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$240,000
|
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Cost Driver
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5,000 labor hrs
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120 set ups
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% of use
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30,000 units
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Production of 2,000 units of a pipe-cutting tool required 600 labor hours, 16 setups, and consumed 35 % of the product sustaining activities and resulted in an overhead allocation of $34,850. What amount of batch-level overhead costs was expected during the period?