Question

The Arial Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in smart phones. Consider the following data regarding component T24 (amounts are per unit):
Direct materials cost ........ $ 79.00
Direct labor cost ........ 22.00
Activity-based costs allocated .... ?
Total manufacturing product cost ... ?
The activities required to build the component follow:
Requirements
1. Complete the missing items for the two tables.
2. Why might managers favor this ABC system instead of Arial s older system, which allocated all manufacturing overhead costs on the basis of direct labor hours?


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  • CreatedJune 15, 2015
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