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Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor
Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead
rate is computed based on direct laborhours. Data for the two products for the upcoming year follow:
These products are customized to some degree for specific customers.
Required:
The company's manufacturing overhead costs for the year are expected to be $ Using the company's traditional costing
system, compute the unit product costs for the two products.
Management is considering an activitybased absorption costing system in which half of the overhead would continue to be
allocated based on direct laborhours and half would be allocated based on engineering design time. This time is expected to be
distributed as follows during the upcoming year:
Compute the unit product costs for the two products using the proposed activitybased absorption costing system.
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The company's manufacturing overhead costs for the year are expected to be $ Using the company's traditional
costing system, compute the unit product costs for the two products. Round your intermediate calculations and final answers
to decimal places.
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