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Cost Allocation at Amazon Values: Total Overhead Costs: $4,500,000 Machine Hours: 90,000 Labor Hours: 60,000 Requirements: Allocate the overhead costs using machine hours. Allocate the

Cost Allocation at Amazon

Values:

  • Total Overhead Costs: $4,500,000
  • Machine Hours: 90,000
  • Labor Hours: 60,000

Requirements:

  1. Allocate the overhead costs using machine hours.
  2. Allocate the overhead costs using labor hours.
  3. Compare the results of both methods.
  4. Discuss which method provides a more accurate cost allocation.

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