Question: A manager tells you that her company s cost accounting system
A manager tells you that her company's cost accounting system divides overhead into two pools: (1) inspect material and (2) assemble product. The inspect material pool is allocated on the basis of direct material dollars and the assemble product pool is allocated on the basis of direct labor costs. She says that her controller claims this is an activity-based cost system, but she is not convinced and has asked your opinion. How would you respond?
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