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Sheffield Toys & Games, Inc. manufactures specialty toys. Sheffield uses a traditional product costing system to assign overhead costs uniformly to all products. To meet
Sheffield Toys & Games, Inc. manufactures specialty toys. Sheffield uses a traditional product costing system to assign
overhead costs uniformly to all products. To meet industry safety standards and to assure its customers of safe and
durable toys, Sheffield assigns its qualitycontrol overhead costs to all products at a rate of of direct labor costs.
Its direct labor cost for the month of August for its toddler line of toys is $ In response to repeated requests
from its financial vice president, Sheffield's management agrees to adopt activitybased costing. Data relating to the
toddler line of toys for the month of August are as follows:
a
Compute the qualitycontrol overhead cost to be assigned to the toddler toy line for the month of August using
the traditional product costing system direct labor is the cost driver and using activitybased costing.
QualityControl Overhead Cost
Traditional costing
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