The Abram Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in handheld video phones.

Question:

The Abram Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in handheld video phones. Consider the following data regarding component T24:

Direct materials cost Direct labor cost Activity costs allocated Manufacturing product cost 81.00 21.00 $4

The activities required to build the component follow:

The Abram Manufacturing Company in Rochester,

Requirements
1. Complete the missing items for the two tables.
2. Why might managers favor this ABC system instead of Abram€™s older system, which allocated all conversion costs on the basis of directlabor?

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Related Book For  book-img-for-question

Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

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