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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 Cost Driver
Problem 3: Rawls Company (Overhead Allocation) The following table provides information about Rawls Company that produces two products, cell phones and tablets. Activity Cost Driver Activity level Cost Cell phones Tablets Production Setup Number of setups $180,000 10 20 Material Handling Number of parts $15,000 19 31 Packaging and shipping Number of units shipped $60,000 25,000 15,000 Total Overhead Costs $255,000 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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