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Calculate the overhead assigned to the leather case line using the traditional costing system based on labor hours. Calculate the overhead assigned to the leather
- Calculate the overhead assigned to the leather case line using the traditional costing system based on labor hours.
- Calculate the overhead assigned to the leather case line using ABC.
- Was the leather case over- or undercosted by the traditional cost system compared to ABC?
Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Total estimated overhead costs are $194,500, of which $162,500 is assigned to the materials handling pool and $32,000 is assigned to the setup pool
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