Corporation manufactures travel clocks and watches.
Overhead costs are currently allocated using direct labor hours,
but the controller has recommended an activity-based costing
system using the following data:
Activity
Production Setup
Cost Cost Driver
$120,000 No. of setups
Material Handling
& Requisition
30,000 No. of parts
Packaging
& Shipping
60,000 #Units Shipped
Total Overhead
Direct labor hours
Clocks
10
Watches
15
18
36
45,000
75,000
35,000
105,000…
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