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Seco, Inc., produces two types of clothes dryers: deluxe and regular. Seco uses a plantwide rate based on direct labor hours to assign its overhead
Seco, Inc., produces two types of clothes dryers: deluxe and regular. Seco uses a plantwide rate based on direct labor hours to assign its overhead costs. The company has the following estimated and actual data for the coming year: Estimated overhead $2,016,000 48,000 Expected activity Actual activity (direct labor hours): Deluxe dryer 12,000 36,000 Regular dryer Units produced: Deluxe dryer 24,000 Regular dryer 180,000 3. What if the deluxe product used 24,000 hours (to produce 24,000 units) instead of 12,000 hours (total expected hours remain the same)? Calculate the effect on the profitability of this product line it all 24,000 units are sold Profits would decrease by
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