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Nall Products manufactures a wide variety of products in several facilities. It produces three models of mobility scooters in its St. Claire plant: models NP-10,
Nall Products manufactures a wide variety of products in several facilities. It produces three models of mobility scooters in its St. Claire plant: models NP-10, NP-20, and NPX-70. The machine and labor times for the three models are similar. The difference in the production process is in the amount of testing, size of the production runs, and so on. The St. Clair plant allocates manufacturing overhead based on machine-hours. Last month, the company shipped 750 NP-10s, 500 NP-20s, and 250 NPX-70s. The revenues and expenses for the last month were as follows: After a review of operational and financial practices at the plant, a consultant recommended that the St. Clair plant adopt an ABC system for computing product costs to provide better information for routine decisions. The consultant also recommended the following activities and drivers be used in the system: The consultant also suggested not allocating the fixed costs to products, because "there does not seem to be much of a link between the costs and production activity." a. Using machine-hours to allocate production overhead, complete the income statement for Nall Products for the month. Follov consultant's recommendation and do not attempt to allocate general plant support or other fixed costs. b. Complete the income statement using the bases recommended by the consultant. c. How might activity-based costing result in better decisions by Nall Product's management? Complete this question by entering your answers in the tabs below. Using machine-hours to allocate production overhead, complete the income statement for Nall Products for the month. Follow the consultant's recommendation and do not attempt to allocate general plant support or other fixed costs. Note: Do not round intermediate calculations. Input all amounts as positive values. Round final answers to the nearest whole Complete the income statement using the bases recommended by the consultant. Note: Do not round intermediate calculations. Input all amounts as positive values. Round final answers to the nearest whole dollar
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