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Cost Drivers and Allocating Overhead Costs You are given the following information for an engineering and manufacturing group: The group has undertaken three projects that
Cost Drivers and Allocating Overhead Costs You are given the following information for an engineering and manufacturing group: The group has undertaken three projects that have utilized resources according to the following table: Calculate the direct costs for each project Calculate the overhead costs that would be allocated to each project based on: (1) space utilization, (2) manufacturing machine utilization, (3) Engineering direct hours, (4) pipe fitter direct hours, or (5) total direct hours Calculate the total cost for each project when the overhead is allocated according to: (1) space utilization, (2) manufacturing machine utilization, (3) Engineering direct hours, (4) pipe fitter direct hours, or (5) total direct hours Comment on how the five different cost drivers that are used affect the overall cost of each project. How might the use of one allocation cost driver over another affect the decision to proceed with a project? How might the use of an incorrect cost driver affect a company's performance and profitability
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