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13) St. James, Inc., currently uses traditional costing procedures to allocate manufacturing overhead to its two products, Beta and Zeta, on the basis of direct

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13) St. James, Inc., currently uses traditional costing procedures to allocate manufacturing overhead to its two products, Beta and Zeta, on the basis of direct labor hours. For 2018, St. James has budgeted $800,000 of manufacturing overhead for 4,000 direct labor hours. St. James, Inc. is considering a shift to activity-based costing (ABC) with the creation of individual cost pools that will use direct labor hours (DLH), production set-ups (SU) and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes are: Pool #1 Pool #2 Pool #3 Product (Driver: DLH) (Driver: SU) (Driver: PC) Beta 1,200 DLH 45 set-ups 2,250 PC Zeta 2,800 DLH 55 set-ups 750 PC Pool Cost $160,000 $280,000 $360,000 a) using traditional costing procedures, what is the predetermined overhead rate? b) the overhead cost allocated to Beta by using Activity Based Costing procedures would be: a. $240,000. b. $356,000. c. $444,000. d. $560,000

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