The president of Celestial Printing has decided to use the practical capacity of the firms printers to
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The president of Celestial Printing has decided to use the practical capacity of the firm’s printers to determine the application rates per machine hour for overhead. She believes that the cost of unused capacity would be valuable information. As the controller begins to calculate application rates for the coming year, he is surprised to find that several more printers were purchased during the previous year despite there being considerable excess capacity.
How does the cost allocation system affect the behavior of managers?
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Related Book For
Management Accounting In A Dynamic Environment
ISBN: 9780415839020
1st Edition
Authors: Cheryl S McWatters, Jerold L Zimmerman
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