Assume a company uses a plantwide predetermined manufacturing overhead rate, which is calculated using direct labour hours

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Assume a company uses a plantwide predetermined manufacturing overhead rate, which is calculated using direct labour hours as the cost driver. The use of this plantwide predetermined
MOH rate has resulted in cost distortion. The company's high-volume products are overcosted and its low-volume products are undercosted. What effects of this cost distortion will the company most likely be experiencing? Why might the cost distortion be harmful to the company's competitive position in the market?
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Managerial Accounting

ISBN: 978-0133025071

2nd canadian edition

Authors: Karen W. Braun, Wendy M. Tietz, Rhonda Pyper

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