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Honda Motor Co., Ltd. operates three business segments: Automobiles, Motorcycles, and Power Products. The total overhead costs for the year amounted to $6 million. Using

Honda Motor Co., Ltd. operates three business segments: Automobiles, Motorcycles, and Power Products. The total overhead costs for the year amounted to $6 million. Using the activity-based costing (ABC) method, allocate the overhead costs to each segment based on the following activity drivers and percentages:

  • Automobiles: 40% of total activity
  • Motorcycles: 30% of total activity
  • Power Products: 30% of total activity

Calculate the overhead costs allocated to each segment.

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