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Comment on the accuracy of the two methods for determining product costs. Discuss some of the strategic implications of your answers to the previous requirements.
Comment on the accuracy of the two methods for determining product costs. Discuss some of the strategic implications of your answers to the previous requirements. Traditional Product Costing versus Activity-Based Costing High Country Outfitters, Inc., males backpacks for large sporting goods chains that are sold under the customers' store brand names. The Accounting Department has identified the following overhead costs and cost drivers for next year Total predicted direct labor hours for next year is 60,000. The following data are for two recently completed jobs: Determine the unit cost for each job using a traditional plantwide overhead rate based on direct labor hours. Determine the unit cost for each job using ABC. (Round answers to two decimal places ) As the manager of High Country, is there additional information that you would want to help you evaluate the pricing and profitability of Jobs 201 and 202? Assuming the company has been using the method required in part a, how should management react to the findings in part b? Customer Profitability Analysis Gonalong, Inc., has 10 customers that account for all of its $4,200,000 of net income. Its activity-based costing system is able to assign all costs, except for $650,000 of general administrative costs, to key activities incurred in connection with serving its customers. A customer profitability analysis based on activity costing produced the following customer profits and losses
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