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Manufacturing Overhead Allocation
If anyone could help me with this problem I would greatly appreciate it. I have tried and read the book and can not find out how to do this problem. Please Help!!
Company A Company B Company C Direct Materials 7% 21% 42% Direct Labor 13 42 49 Manufacturing Overhead 80 37 9 Based on the information which company would improve its product costing by converting to activity based costing? Why? |
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A
Explain your answer. Advocates maintain that ABC can provide management with a more accurate assignment of overhead to products and, therefore, a better understanding of profitability. Direct labor and materials costs are easier to allocate and track than manufacturing overhead costs. |
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