Precision Brackets,Co.is considering switching from traditional allocation of overhead based on direct labor hours to an activity-based costing system.The manager has accumulated the following information on engineering changes for two of the company's major products:
Compute the cost per unit using:
(1)The traditional two-stage allocation of the costs of engineering changes based on direct labor hours.
(2)The activity-based cost allocation of the costs of engineering changes.

Question

Precision Brackets,Co.is considering switching from traditional allocation of overhead based on direct labor hours to an activity-based costing system.The manager has accumulated the following information on engineering changes for two of the company's major products:
  Compute the cost per unit using:
(1)The traditional two-stage allocation of the costs of engineering changes based on direct labor hours.
(2)The activity-based cost allocation of the costs of engineering changes.

Quizplus · Accepted Answer

The Answer of Precision Brackets,Co.is considering switching from traditional allocation of overhead based on direct labor hours to an activity-based costing system.The manager has accumulated the following information on engineering changes for two of the company's major products:
  Compute the cost per unit using:
(1)The traditional two-stage allocation of the costs of engineering changes based on direct labor hours.
(2)The activity-based cost allocation of the costs of engineering changes.