The plant asset and accumulated depreciation accounts of pell corporation had the following balances at december 31, 2020: plant asset $ 350,000 $ — land improvements 180,000 45,000 building 1,500,000 350,000 equipment 1,158,000 405,000 automobiles 150,000 112,000 transactions during 2021 were as follows: on january 2, 2021, equipment were purchased at a total invoice cost of $260,000, which included a $5,500 charge for freight. installation costs of $27,000 were incurred. on march 31, 2021, a small storage building was donated to the company. the person donating the building originally purchased it three years ago for $25,000. the fair value of the building on the day of the donation was $17,000.on may 1, 2021, expenditures of $50,000 were made to repave parking lots at pell’s plant location. the work was necessitated by damage caused by severe winter weather. the repair doesn’t provide future benefits beyond those originally anticipated. on november 1, 2021, pell acquired a tract of land with an existing building in exchange for 10,000 shares of pell's common stock that had a market price of $38 per share. pell paid legal fees and title insurance totaling $23,000. shortly after acquisition, the building was razed at a cost of $35,000 in anticipation of new building construction in 2022.on december 31, 2021, pell purchased a small storage building by giving $15,250 cash and an old automobile purchased for $18,000 in 2014. depreciation on the old automobile recorded through december 31, 2021, totaled $13,500. the fair value of the old automobile was $3,750.required: prepare a schedule analyzing the changes in each of the plant assets during 2021.

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?