Fluffy Corp

Essay

Fluffy Corp. is a factory that produces cloud-shaped home décor, and their most successful product to date has been a small cloud pillow. Fluffy is considering a switch to Activity-Based Costing (ABC) and has finally identified the key activities they would like to use to allocate their manufacturing overhead costs. Management would like some additional information about how this method would allocate a recent production run of cloud pillows.
The production department had a recent run of cloud pillows that used the following: 1,300 square feet; 2,420 machine setups; and 1,997 pounds of material. How much unit-level cost should be allocated to the production department of Fluffy? (If required, round calculations to two decimal places.)