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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
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: a. Compute the overhead rate for each cost driver. b. An order for 10 large picnic tables had the following requirements: How much overhead would be assigned to this order? c. What could management do to reduce the overhead costs assigned to these tables? What would be the impact on company net income of reducing overhead assigned to the tables
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