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Please solve. 9-57. Activity-Based Costing: Analysis and Visualization ( LO 9-5, [) 6 ) Clairepoint Medical Devioes, Inc. (CMDI) makes three types of a diagnostic
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9-57. Activity-Based Costing: Analysis and Visualization ( LO 9-5, [) 6 ) Clairepoint Medical Devioes, Inc. (CMDI) makes three types of a diagnostic device. For internal purposes, these models are referred to as Alpha, Beta, and Gamma, respectively. Although they are designed to provide the same information, the models differ by the quality of the materials and their electronic capabilities. The Alpha model is a relatively simple device that requires more manual data entry and retrieval. The Gamma model automates much of the interface with the user. As a purveyor of certain medical devices, including these models, CMDI requires certification for each model, regardless of the number of units sold. CMDI computes product costs by allocating all mamufacturing orerhead to products based on direct labor costs. After attending a seminar on flnancial analysis, the chief marketing offlcer (CMO) of CMDI asked the plant controller about ABC and whether it could be used for the costing of these three models. To respond to the request, the controller collected the following information for the upooming period: Product-line information for the upooming period follows: Pagx418 Requined a Compute the unit product costs for the upcoming period using the current system, which allocates overhead based on direct labor costs. b. Compute the unit product costs for the upcoming period based on an ABC system using the activities and cost drivers identifled by the controller. a Prepare a report for the CMO on the reasons for the differences in the costs, the implications for decisions, and how the results might be used to manage costs. Be sure to include any visual support appropriate to illustrate your analysisStep by Step Solution
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