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c 2. An intern suggested that the company should use activity-based costing to cost its products. A team was formed to investigate this idea, and
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2. An intern suggested that the company should use activity-based costing to cost its products. A team was formed to investigate this idea, and it came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities follow: Activity cost pool and activity driver Estimated overhead costs Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine related (machine hours) $476,800 562,400 908,000 3236,800 $5,184,000 Activity level Deluxe Regular 1,184 1,200 810 1,440 5,000 6,350 15,240 25,220 Assume that the actual activity is as expected for the year. Using activity-based costing, compute the unit product cost for one unit of each model. (7 marks)Step by Step Solution
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