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Exercise 12-17 Cost allocation in a manufacturing company Hunt Manufacturing makes tents that it sells directly to camping enthusiasts through a mail order marketing program.
Exercise 12-17 Cost allocation in a manufacturing company Hunt Manufacturing makes tents that it sells directly to camping enthusiasts through a mail order marketing program. The company pays a quality control expert $72,000 per year to inspect completes tents before they are shipped to customers. Assume that the company completed 1,600 tents in January and 1,200 tents in February. For the entire year, the company expects to produce 15,000 tents. Required A.Explain how changes in the cost driver (number of tents inspected) affected the total amount of fixed inspection cost. B.Explain how changes in the cost driver (number of tents inspected) affect the amount of fixed inspection cost per unit. C.If the cost objective is to determine the cost per tent, is the expert
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