Question: Assume the same data as in Problem 5-14B with the following additional information. The hours of machine time for processing plates are 1,000 for Diana

Assume the same data as in Problem 5-14B with the following additional information. The hours of machine time for processing plates are 1,000 for Diana plates and 2,500 for Monroe plates.

Required

a. Establish two activity centers, one for machine-related activities and the second for labor- related activities. Assign the total overhead costs to the two activity centers.

b. Allocate the machine-related overhead costs to each product based on machine hours.

c. Allocate the labor-related overhead costs to each product based on direct labor hours.

d. Draw a diagram that compares the one-stage allocation method used in Problem 5-14B with the two-stage activity-based costing approach used in this problem.

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