9781118334331

E4-11 Health ?R Us, Inc., uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products. To meet Food and Drug Adminis- tration requirements and to assure its customers of safe, sanitary, and nutritious food, Health ?R Us engages in a high level of quality control. Health ?R Us assigns its quality- control overhead costs to all products at a rate of 17% of direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $70,000. In response to repeated requests from its nancial vice president, Health ?R Us?s management agrees to adopt activity-based costing. Data relating to the low-calorie breakfast line for the month of June are as follows.

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