Listed next are several activities and related costs that have been observed at Santana Company, a manufacturing company. The company makes a variety of products and currently uses a traditional costing system that allocates only production overhead based on direct-labor hours. It is implementing an ABC system for the design, production, and distribution functions of its value chain. You have been asked to complete the following table by indicating for each activity whether the related cost is direct, indirect, or unallocated. For each indirect cost, indicate one appropriate cost-allocation base (more than one cost-allocation base may be appropriate). The first two items have been completed foryou.
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