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Please include formulas, I'd like to learn the whole process. Thank you! Practice Problem 12.1 Archery Equipment Corporation (AEC) manufactures lawn mowers in two divisions:
Please include formulas, I'd like to learn the whole process. Thank you!
Practice Problem 12.1 Archery Equipment Corporation (AEC) manufactures lawn mowers in two divisions: Commercial and Consumer. Both divisions require the support of Product Development, an engineering service department that designs new products based on marketing data. The following annual information is available: $1,500,000 120 Budgeted fixed costs of running Product Development Budgeted variable cost of running Product Development per hour Budgeted usage of Product Development Commercial Division Consumer Division Actual usage of Product Development Commercial Division Consumer Division 4,000 hours 3,500 hours 4,500 hours 3,000 hours Required: 1. Determine the allocation of Product Development costs to the two divisions using the single rate method where the actual hours of usage will be the allocation base. 2. Determine the allocation of Product Development costs to the two divisions using the dual rate method, assuming fixed costs use budgeted hours while variable costs use actual hours of usage as allocation basesStep by Step Solution
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