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please solve this ASAP Star Ltd. produces two models of chairs, which are the Executive and Home models. The manufacturing overhead costs are distributed to
please solve this ASAP
Star Ltd. produces two models of chairs, which are the Executive and Home models. The manufacturing overhead costs are distributed to the products at a rate of $80 per machine hour. The production information of the two models are as follows: Its management accountant intends to use the activity-based costing method and has identified three activities that are related to the production, which are the machine preparation, processing and delivery. The data related to these three activities are as follows: The total overhead for the company is $6,160,000, where $1,344,000 is for preparation, $3,696,000 for machine processing and $1,120,000 for delivery. a) Calculate the unit cost for Executive and Home models by using activity-based costing method. (20 Marks) b) The current selling price for the Executive model is $270 per unit and the marketing manager proposes to reduce its price by $30 to increase sales. Is this proposal reasonable and acceptable? (20 Marks) Step by Step Solution
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