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Using the plantwide approach what percent of the company's total overhead cost would be allocated to product A Assume that a company makes only three
Using the plantwide approach what percent of the company's total overhead cost would be allocated to product A
Assume that a company makes only three products: Product A, Product B. and Product C. Currently, the company uses a conventional cost system that relies on plantwide overhead cost allocation based on direct labor-hours. It is considering replacing its conventional cost system with an activity-based costing (ABC) system. The ABC system would include a total of four activities: Assembly (allocated to products based on direct labor-hours), Machine Setups (allocated to products based on number of setups), Material Handling (allocated to products based on the number of material moves), and Product Design (allocated to products based on the number of products). Number of units produced Direct labor hours per unit Number of setups Number of material moves Number of products Product A 1,000 units 2 hours 30 setups 600 moves 1 product Product B 7,eee units 2 hours 58 setups 400 moves 1 product Product C 2,eee units 2 hours 20 setups 2ee moves 1 product Using the plantwide approach, what percent of the company's total overhead cost would be allocated to Product A? Multiple Choice 3396 O O 10% O 25% 15%
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