Question
the company relies on a third-party carrier to deliver their frozen banana pudding cups to different parts of the country. To streamline the storing and
the company relies on a third-party carrier to deliver their frozen banana pudding cups to different parts of the country. To streamline the storing and delivery of frozen banana pudding cups that are ready to be shipped to customers, the senior management plan to invest $1 million to build a warehouse just outside White Plains next year. The book value of the warehouse will depreciate over the next 20 years. Could you help Joe and his supervisor determine how the depreciation expense of the warehouse will affect the gross margin of the two products if the company uses the traditional costing system?
If the company uses the activity-based costing system instead, how will the depreciation expense of the warehouse affect the product margin of the two products?
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