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Exercise 5-27 Activity-Based Costing: Quality Control Costs (Lo 5-1, 5-2, 5-4) Urban Elite Cosmetics has used a traditional cost accounting system to a 14 percent
Exercise 5-27 Activity-Based Costing: Quality Control Costs (Lo 5-1, 5-2, 5-4) Urban Elite Cosmetics has used a traditional cost accounting system to a 14 percent of direct-labor cost. Monthly direct-labor cost for Satin Sheen makeup is $95.000. In an attempt to more equitably distribute quality-control costs, management is considering activity-based costing. The monthly data shown in the following chart have been gathered for Satin Sheen makeup Quantity of Driver for Satin Sheen Activity Cost Incoming material inapectionype of material2 In-process inspection Product certification Pool Cost Driver Pool Rates 0.00 Pe LYPe 022 PE unit 20 types Number of units Per order 30,000 units 140-00 per order ss order8 Required: 1. Calculate the monthly quality control cost to be assigned to the Satin Sheen product line under each of the following product costing systems. a. Traditional system, which assigns overhead on the basis of direct-labor cost. b. Activity-based costing. 2. Does the traditional product-costing system overcost or undercost the Satin Sheen product line with respect to quality-control costs? By what amount? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the monthly quality-control cost to be assigned to the Satin Sheen product line under the Traditional product-costing
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