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Amesbury Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials and direct labor) and one indirect-cost pool (assembly
Amesbury Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials and direct labor) and one indirect-cost pool (assembly support). Direct labor-hours is the allocation base for assembly support costs. In December 2019, Amesbury budgets 2020 assembly-support costs to be $8,400,000 and 2020 direct labor-hours to be 168,000. At the end of 2020, Amesbury is comparing the costs of several jobs that were started and completed in 2020. (Click the icon to view the data.) Read the requirements Requirement 1. Compute the (a) budgeted indirect-cost rate and (b) actual indirect-cost rate. Why do they differ? Identify the formula to calculate the budgeted indirect cost rate and then calculate the rate. Budgeted indirect cost rate
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