First stage allocations: The financial statement of the company classifies the cost department wise. Therefore, it is necessary to allocate the cost to different activities in order to build a relationship between the activity and the costing. Calculate the first-stage allocations of costs to activity cost pools.

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During its first year of operations, Saboori Manufacturing paid $13,200 for direct materials and $11,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $10,400, while general, selling, and administrative expenses totaled $5,200. The company produced 6,200 units and sold 4,000 units at a price of $8.50 per unit. What is Saboori Manufacturing's cost of goods sold for the year?help

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Chapter 5, Problem 5.7E

To determine

Concept introduction:

First stage allocations:

The financial statement of the company classifies the cost department wise. Therefore, it is necessary to allocate the cost to different activities in order to build a relationship between the activity and the costing.

Calculate the first-stage allocations of costs to activity cost pools.

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During its first year of operations, Saboori Manufacturing paid $13,200 for direct materials and $11,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $10,400, while general, selling, and administrative expenses totaled $5,200. The company produced 6,200 units and sold 4,000 units at a price of $8.50 per unit. What is Saboori Manufacturing's cost of goods sold for the year?help

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