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l Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to all products at a rate 15 percent of
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Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to all products at a rate 15 percent of direct-labor cost. Monthly direct-labor cost for Satin Sheen makeup is $96,000. In an attempt to more equitably distribu quality-control costs, management is considering activity-based costing. The monthly data shown in the following chart have been gathered for Satin Sheen makeup. Required: 1. Calculate the monthly quality-control cost to be assigned to the Satin Sheen product line under each of the following productcosting systems. a. Traditional system, which assigns overhead on the basis of direct-labor cost. b. Activity-based costing. 2. Does the traditional product-costing system overcost or undercost the Satin Sheen product line with respect to quality-control costs? By what amount? Complete this question by entering your answers in the tabs below. Calculate the monthly quality control cost to be assigned to the Satin Sheen product line under the Traditional product-costing system and the Activity-based product-costing system. costs? By what amount? Complete this question by entering your answers in the tabs below. Calculate the monthly quality-control cost to be assigned to the Satin Sheen product line under the Traditional product-costing system and the Activity-based product-costing system. Complete this question by entering your answers in the tabs below. Does the traditional product-costing system overcost or undercost the Satin sheen product line with respect to quality-control coste? By what amount Step by Step Solution
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