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Note - The background information is the same for all parts of this question. GolfClubsRUs manufactures 3 types of golf clubs: drivers, wedges, and putters.
Note - The background information is the same for all parts of this question. GolfClubsRUs manufactures 3 types of golf clubs: drivers, wedges, and putters. The company has decided to adopt an ABC system for allocating manufacturing overhead to production. It determines that the manufacturing process is made up of 3 activities machine set-up Fabrication, and packaging. The cost of each activity will be allocated using the activity allocation bases indicated and the estimated cost for each activity in 2020 is as shown: Activity Activity Allocation Base Total 2020 Estimated Cost Machine Set-up Number of set-ups $210,000 Fabrication Direct labor hours 102,000 Packaging Number of boxes 19.200 In addition, GolfClubsRUs estimates the following for 2020: Units to be Produced Direct labor hours per unit Number of set-ups Number of clubs in each box Drivers 5,000 5 hours Wedges 10,000 2 hours 100 Putters 2,000 3 hours 100 Q2: Calculate the predetermined ABC overhead rate for Fabrication (le, enter the number of dollars per direct labor hour)
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