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Smithville Industries has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on machine-hours (MHs).

image text in transcribed Smithville Industries has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on machine-hours (MHs). The company has two products, Manual and Power, about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $2,500,000 and the company's estimated total machine hours for the year is The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Required: a. Determine the product cost per unit of each of the company's two products under the traditional costing system. b. Determine the product cost per unit of each of the company's two products under activity-based costing system. c. Which costing system is more accurate? How were the products miss-costed in the less accurate system

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