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Problem 3: Rawls Company (Overhead Allocation) The following table provides information about Rawls Company that produces two products, cell phones and tablets. Activity level Cell
Problem 3: Rawls Company (Overhead Allocation) The following table provides information about Rawls Company that produces two products, cell phones and tablets. Activity level Cell phones Activity Cost Driver Tablets Cost Production Setup Material Handling Packaging and shipping $180,000 $15,000 Number of units shipped $60,000 $255,000 Number of setups Number of parts 10 20 19 31 25,000 15,000 Total Overhead Costs Compute the amount of overhead allocated to one tablet if ABC principles are used to allocate overhead costs (0.5 point) and discuss advantages and disadvantages using ABC method, compared to using traditional volume-based OH allocation, in this specific setting (0.5 point)
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