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Implementing activity-based costing for a service company, the following data is provided: Activity Total Cost ($) Cost Driver Cost Driver Quantity Activity 1 10,000 Units
Implementing activity-based costing for a service company, the following data is provided:
Activity Total Cost ($) Cost Driver Cost Driver Quantity Activity 1 10,000 Units Produced 5,000 Activity 2 8,000 Number of Customers 100 Activity 3 12,000 Machine Hours 2,000 Your requirements are as follows:
- Calculate the cost per unit of the cost driver for each activity.
- Assign overhead costs to products using activity rates.
- Present the allocation process in a table format.
- Provide a paragraph discussing the advantages of ABC over traditional costing methods.
- Discuss potential limitations of ABC implementation.
- Include a bullet list of recommendations for implementing ABC effectively.
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