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Lotus uses activity-based costing. The activity cost pools and drivers are as follows: setup costs $7,500,000 with 700 setups, material handling costs $3,500,000 with 70,000
Lotus uses activity-based costing. The activity cost pools and drivers are as follows: setup costs $7,500,000 with 700 setups, material handling costs $3,500,000 with 70,000 material moves, and inspection costs $2,800,000 with 35,000 inspections. Calculate the cost driver rate for each activity and determine the cost assigned to a product requiring 40 setups, 10,000 material moves, and 5,000 inspections. Prepare the balance sheet after the formation of the partnership.
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