Refer to Exercise El9-19. For 2017, Erickson’s managers have decided to use the same indirect manufacturing costs per wheel rim that they computed in 2016. In addition to the unit indirect manufacturing costs, the following data are expected for the company’s standard and deluxe models for 2017:
Because of limited machine hour capacity, Erickson can produce either 2,000 standard
1. If Erickson’s managers rely on the ABC unit cost data computed in Exercise El9-19, which model will they produce? Carry each cost to the nearest cent.
2. If the managers rely on the single plantwide overhead allocation rate cost data, which model will they produce?
3. Which course of action will yield more income for Erickson?

  • CreatedJune 15, 2015
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