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XYZ Ltd. uses activity-based costing (ABC) to allocate overhead costs. The company identified three cost pools: setup costs, machine-related costs, and batch-related costs. If the
XYZ Ltd. uses activity-based costing (ABC) to allocate overhead costs. The company identified three cost pools: setup costs, machine-related costs, and batch-related costs. If the total overhead costs for the year were $200,000, and the activity drivers and rates were as follows: 200 setups at $500 per setup, 10,000 machine hours at $10 per hour, and 100 batches at $1,000 per batch, calculate the overhead cost allocated to a product requiring 2 setups, 100 machine hours, and 1 batch.
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