Based on direct labor cost

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Maria, the manager of Department T, was convinced that tennis rackets were really more profitable than baseball bats. She asked her colleague in accounting to break down the overhead cost for the two departments. She discovered that had department rates been used. Department B would have had a rate of 150 percent of direct labor cost and Department T would have had a rate of 300 percent of direct labor cost. Re-compute the profits for each product using each department’s allocation rate (based on direct labor cost).

Reference no: EM13790654

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