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Kaizer Bags and Accessories manufacturing Company has decided to produce two different briefcases: nylon and leather. They are deciding whether to use job-order costing or
Kaizer Bags and Accessories manufacturing Company has decided to produce two different briefcases: nylon and leather. They are deciding whether to use job-order costing or activity based costing. Based on next year's budget, two cost pools have been developed with the following information: Nylon Leather OH Direct Labour 70000 180000 Machine Hours 2000 2000 400000 machine setup 50 200 200000 Required: a) Compute the plant wide overhead rate if overhead is applied based on direct labor hours. b) Compute the overhead rates using activity based costing. c) Determine the difference in the amount of overhead allocated to each product between the two methods
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