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Brooklyn cycles produces custom bicycles

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Brooklyn Cycles produces custom bicycles and has used a traditional manufacturing overhead application rate based on direct labor hours. Currently, overhead is applied at the rate of $26/DLH. Brooklyn is now considering using activity based driver rates to improve manufacturing overhead costing accuracy.

Budgeted manufacturing overhead costs for expected driver activity are:

1744_262-B-A-F-R (1198).png

Required:

Calculate manufacturing overhead rates that would be applied to bicycles produced using activity based costing, and explain how Brooklyn Cycles could achieve improved costing accuracy. 

Reference no: EM13913240

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