Pletzke Company manufactures dental instruments. The companys product line includes products as simple as dental picks and

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Pletzke Company manufactures dental instruments. The company’s product line includes products as simple as dental picks and products as complex as panoramic x-ray machines. Carol Lindquist, a senior product manager responsible for implementing an activity-based costing system at Pletzke, identified the following three activity cost pools: assembling, packaging, and designing. Carol also investigated the components of overhead cost and determined that each cost is split among the three cost pools based on the following percentages.


Required

a. Using the percentages above, calculate the costs included in each of the three activity cost pools.

b. Why might Carol have felt the need to implement an activity-based costing system? Be sure to con sider how costs are incurred within the three categories.

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Related Book For  book-img-for-question

Managerial Accounting

ISBN: 9781119577669

4th Edition

Authors: Charles E. Davis, Elizabeth Davis

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