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Activity-Based And Department Rate Product Costing and Product Cost Distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead
Activity-Based And Department Rate Product Costing and Product Cost Distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor Cutting Department Finishing Department Total $507,000 156,000) 192,000 $855,000 The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Production control Budgeted Activity Cost Activity Base $237,000 Number of production runs Materials handling Total 270,000 $507,000 Number of moves The activity-base usage quantities and units produced for the two products follow:
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