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Compute total machine setups and inspection costs

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Reference no: EM132781151

Question - Jati Industries manufactures dining chairs and tables. The following information is available:

 

Dining Chairs

Tables

Total Cost

Machine setups

200

600

RM48,000

Inspections

250

470

RM72,000

Labor hours

2,600

2,400

 

Jati Industries is considering switching from one overhead rate based on labor hours to activity-based costing.

Required - Perform the following analyses for these two components of overhead:

a. Compute total machine setups and inspection costs assigned to each product, using a single overhead rate.

b. Compute total machine setups and inspection costs assigned to each product, using activity-based costing.

c. Comment on your findings.

Reference no: EM132781151

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