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Hi can I receive answers for question 10 a, b and c . Working out will be important ABC: Comparison to traditional costing LO2, 3,
Hi can I receive answers for question 10 a, b and c. Working out will be important
ABC: Comparison to traditional costing LO2, 3, 4 Surfs Up manufactures surfboards. The company produces models: the small board and the big board Data regarding the two boards are as follows: The big board requires $75 in direct materials per unit whereas the small board requires $40. The company pays an average direct labour rate of $13 per hour. The company has historically used direct labour hours as the activity base for applying overhead to the boards. Manufacturing overhead is estimated to be $1664000 per year. The big board is more complex to manufacture than the small board because it requires more machine time. Blake Moore, the company's controller, is considering the use of activity-based costing to apply overhead because the surfboards require such different amounts of machining. Blake has identified the following four separate activity centres. Required Calculate the overhead rate based on traditional overhead allocation with direct labour hours as the base. Determine the total cost to produce one unit of each product. (Use the overhead rate calculated in question A.) Calculate the overhead rate for each activity centre based on activity-based costing techniques. Determine the total cost to produce one unit of each product. Use the overhead rates calculated in question C. Explain why overhead cost shifted from the high-volume product to the low-volume product under activity-based costingStep by Step Solution
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