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3. (8 points) Ramirez Corp. has two customers, C1 and C2. Ramirez Corp currently allocates indirect costs to customers at a rate of 5% of
3. (8 points) Ramirez Corp. has two customers, C1 and C2. Ramirez Corp currently allocates indirect costs to customers at a rate of 5% of customer revenue. Data for C1 and C2 are as follows: Using the current cost allocation method, calculate the indirect cost allocated to customers C1 \& C2. b. Calculate the indirect cost allocated to C1 \& C2 using the Activity Based Costing (ABC) system. c. Comparing the indirect cost allocated in part a. to the indirect cost allocated in part b. discuss an important strategic implication (not operational-don't discuss ABC activity usage) of your analysis
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