Scenario
You just got the keys to your first apartment. You also have a
new credit card with a $2,000 limit. As part of your new
monthly bills, you must pay:
• $50 towards electricity
$50 towards gas
• $200 in maintenance
• $700 in rent
Additionally, you must furnish your home and set a monthly
budget for food purchases. In order to move into your own
apartment, you had to borrow $3,000 (to pay your first and
last month's rent and the security deposit for the apartment),
from your parents. Don't forget to save 5% of your monthly
salary for your annual vacation bash.
Your monthly income is $2,000 (after taxes).
1. Calculate the amount of money you need to save each
month to put towards your vacation:

Zachary 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 $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide 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? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?