Question

Perry Shoes Corporation produces three brands of shoes: Brisk, Pro, and Runner. Relevant information about Perry overhead activities, their respective costs, and their cost drivers follows.


Required
a. Perry currently allocates all overhead costs based on labor hours. The company produced the following numbers of pairs of shoes during the prior year.


Determine the overhead cost per pair of shoes for each brand.
b. Determine the overhead cost per pair of shoes for each brand, assuming that the volume-based allocation system described in Requirement a is replaced with an activity-based costing system. Round your figures to two decimal points.
c. Explain why the per-pair overhead costs determined in Requirements a and bdiffer.


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  • CreatedFebruary 07, 2014
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