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Mannon Companys accountant exclaimed, Our cost accounting system allocates overhead based on direct labour hours, but our overheads cost appear to be more related to

Mannon Companys accountant exclaimed, Our cost accounting system allocates overhead based on direct labour hours, but our overheads cost appear to be more related to setup activities than to the use of direct labour. It seems as though our costing system allocates too much cost to large batches of product and not enough cost to small batches. Explain what she means.

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