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Show work (10 points) Harvard Office Products (HOP) produces three different paper products at its Quincy plant: Supreme, Deluxe, and Regular. Each product has its
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(10 points) Harvard Office Products (HOP) produces three different paper products at its Quincy plant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and manufacturing overheads costs. Total manufacturing overheads of the plant in June 2019 are $200 million ($20 million of which are fixed). This total amount is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for June 2019 are as follows: Direct material costs Direct manufacturing labor costs Manufacturing overhead costs Units produced in June) Supreme $89 $16 $64 125 Deluxe Regular $57 $60 $26 $8 $104 $32 150 140 A. Compute the total manufacturing cost per unit for each product produced in June 2019. B. Suppose that in July 2019, production was 150 million units of Supreme, 190 million units of Deluxe, and 220 million units of Regular. Why might the June 2019 information on manufacturing cost per unit be misleading when predicting total manufacturing costs in July 2019Step by Step Solution
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