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A company is implementing an activity-based budgeting system. Setup overhead is allocated based on setup hours, and manufacturing overhead is allocated based on direct
A company is implementing an activity-based budgeting system. Setup overhead is allocated based on setup hours, and manufacturing overhead is allocated based on direct manufacturing labor hours. Budget information is listed in the table below. Cost driver information Product A Product B Number of units per batch 50 25 Setup time per batch 1.75 hours 1.25 hours Direct manufacturing labor time per batch 1.00 hours 0.75 hours The company plans to produce 1,000 units of Product A and 750 units of Product B. The activity rates are $100 per setup hour and $150 per direct manufacturing labor hour. What is the total budgeted overhead (OH)?
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