Kearney Inc. has a factory with the following characteristics:direct labor of $88403, direct materials of $54985 fixed overhead of $143487, variable overhead of $134149, 11375 units produced, and 402 shipments made. One of its products is LQ6. LQ6 used 166 hours of labor. The factory made 1258 units of LQ6 at a materials cost of $3.32 per unit. LQ6 also requires 51 shipments. All of the factory's labor costs $30 per hour.
Kearney's cost allocation system uses two cost pools. Pool A includes all variable overhead and uses direct labor as the allocation base. Pool B includes all fixed overhead and uses direct materials as the allocation base.
How much cost from Pool A is allocated to LQ6? (round to whole number of $)
a)How much cost from Pool B is allocated to LQ6? (again, round to whole number)
b)Notwithstanding your answers above, assume Kearney allocated $8223 from pool A and $8059 from pool B to LQ6. How much is LQ6's manufacturing cost per unit? (round to the cent, so e.g. 5.57)
c)For this question, do not provide calculations. I want a verbal answer with an explanation, not a bunch of numbers. Of course, feel free to do any calculations you like for your own understanding of the situation. But your answer needs to explain why you got the numerical result you did. I will only grade on the explanation.
Assume that instead of the cost allocation system you used in the previous questions, the company only uses one cost pool for all overhead with an allocation base of shipments. Would LQ6 be allocated more or less cost under the alternate system. Explain why.
Limit your answer to 40 words or less. (I want answers that get directly to the key point without unnecessary detours, and yes I do take points off if you go over the limit).