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Management of a corporation wants to change the way they allocate overhead costs from a traditional costing system to an activity-based costing system. They are
Management of a corporation wants to change the way they allocate overhead costs from a traditional costing system to an activity-based costing system. They are in the process of identifying activity pools and related overhead costs to determine new overhead activty rates. After analyzing their manufacturing operations, they determined the following costs will be combinded to form a cost pool: Receiving Costs $ 15,000 Buyers Salary $ 45,000 Inspection of received raw materials $ 35,000 Which cost driver should they use? Number of direct labor hours Number of purchase orders Number of units produced Number or parts
Management of a corporation wants to change the way they allocate overhead costs from a traditional | |||||||||
costing system to an activity-based costing system. They are in the process of identifying activity pools and | |||||||||
related overhead costs to determine new overhead activty rates. After analyzing their manufacturing | |||||||||
operations, they determined the following costs will be combinded to form a cost pool: | |||||||||
Receiving Costs | $ 15,000 | ||||||||
Buyers Salary | $ 45,000 | ||||||||
Inspection of received raw materials | $ 35,000 | ||||||||
Which cost driver should they use? | |||||||||
Number of direct labor hours | |||||||||
Number of purchase orders | |||||||||
Number of units produced | |||||||||
Number or parts | |||||||||
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