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# 6 . Fortune, Inc., uses activity - based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities:
# Fortune, Inc., uses activitybased costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for and their allocation bases are as follows:
tableActivityBudgeted Cost,Allocation BaseMaterials handling,Number of partsMachine setup,Number of setupsInsertion of parts,Number of partsFinishingFinishing direct labor hours
Fortune expects to produce chrome bumpers during the year. The bumpers are expected to use parts, require setups, and consume hours of finishing time.
Compute the cost allocation rates using activitybased costing.
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