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The Caesar Company manufactures picnic tables. The company's Southeastern plant has changed from a labor-intensive operation to a robotics environment. As a result, management is

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The Caesar Company manufactures picnic tables. The company's Southeastern plant has changed from a labor-intensive operation to a robotics environment. As a result, management is considering changing from a direct-labor based overhead rate to an activity-based cost method. The controller has chosen the following activity cost pools and cost drivers for the factory overhead: Expected Annual Cost Driver Cost Driver Overhead Cost Purchase orders $200,000 Number of orders 10,000 orders Set-up costs $25,000 Number of set-ups 5,000 set-ups $48,000 Number of tests Testing costs 6,000 tests Machine maintenance Machine hours 10,000 hours $250,000 Required a. Compute the overhead rate for each cost driver order for 10 large picnic tables had the following requirements Number of purchase orders 6 25 Number of set-ups 8 Number of product tests 150 Machine hours How much overhead would be assigned to this order? c. What could management do to reduce the overhead costs assigned to these tables? hat would be the impact on company net income of reducing overhead assigned to the tables

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