Hydraulic Hoses, Inc produces specialized industrial hoses for application such as high-pressure hydraulics and the transference of highly corrosive materials. The company recently implemented an ABC system for three of its products and is interested in evaluating its effectiveness before converting to an ABC system for all its products. To perform this evaluation the company has compiled data for three products using both the traditional system and the new ABC system . The traditional system uses a single driver (direct materials cost). The ABC system uses a variety of cost drivers related to the activities used to produce the metal products. The three products involved in the trial run of the ABC system were D-13, K-17, and R-23. The following data relate to these products (attached)

• Describe the production characteristics (for example, high-volume, specialty, etc.) of the three products manufactured by Hydraulic Hoses, Inc. in our case study.

• Describe the characteristics of products which would suggest it would be better to use ABC as an indirect cost allocation method over a traditional method such as direct labor hours.
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