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I need parts A-D Please!!! Pepper's Products currently uses labor costs to allocate all overhead but is conside management decides to allocate administrative costs on
I need parts A-D
Please!!!
Pepper's Products currently uses labor costs to allocate all overhead but is conside management decides to allocate administrative costs on the basis of direct labor costs butto implementing an activity-based costing system. After interviewing the sales and productions following bases to allocate the remaining overhead. Number of units Direct materials Direct labor-hou Number of orde Number of pro Pounds of ma Machine-hour Number of in Units shippe Activity Level Cost Driver Squeaky Silent Activity 5 10 30 16,000 Number of production runs Number of inspections Number of units shipped 16 Setting up Performing quality control Distribution Actual labor 24,000 Required a. a. Compu costs a mined b. Com alloc C. Com mer not ba d. M th Required Complete the income statement using the preceding activity bases. b. Write a report indicating how management might use activity-based costing to reduce cost Restate the income statement for Pepper's Products using direct labor costs as the only one head allocation base. d. Write a report to management stating why product line profits differ using activity-based cos. ing compared to the traditional approach. Indicate whether activity-based costing provides more accurate information and why (if you believe it does provide more accurate informie tion). Indicate in your report how the use of labor-based overhead allocation could calle management at Pepper's Products to make suboptimal decisions. C. aStep by Step Solution
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