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  • Jul 24, 2011, 09:16 PM
    ct2567
    Managerial accounting answer?
    Assume a company uses a planwide predeterminded manufacturing overhead rate that is calculated using direct labor hours as the cost driver. The use of this plantwide predeermined manufacturing overhead rate has resulted in cost distortion. The company's high-volume products are overcosted and its low-volum products are undercosted. What effects of this cost distortion will the company most likely be experiencing? Why might the cost fistortion be harmful to the company's competitive position in the market.

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