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The Alliance For Global Education Operations And Supply Chain Management Assignment Help - Activity Based Costing


Question - Outdoor Texas makes umbrellas, gazebos, and chaise lounges. The company uses a traditional
overhead allocation scheme and assigns overhead to products at the rate of $30 per direct labor hour.
The costs per unit for each product group in 2013 were as follows:

Umbrellas Gazebos Lawn Chairs
Direct material $ 12 $ 120 $ 12
Direct labor
overhead
18
24
135
180
45
60
Total 54 435 117
Because profitability has been lagging and competition has been getting more intense, Outdoor Living
is considering implementing an activity-based costing system for 2014. In analyzing the 2013 data,
management determined that all $12,030,000 of factory over head could be assigned to four basic
activities: quality control, setups, material handlin ...Read More

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