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Discuss low-volume products to customer demand

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Determine the error in the prediction of X1 batch-level costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in overpredicting or underpredicting the batch-level costs of product X1

Multiple Cost Drivers 

Scottsdale Ltd. manufactures a variety of high-volume and low-volume products to customer demand. Presented is information on 2013 manufacturing overhead and activity cost drivers.

Unit $ 500,000   10,000 machine hours
Batch 100,000   500 customer orders
Product 200,000   25 products

Product X1 required 2,000 machine hours to fill 10 customer orders for a total of 8,000 units

Reference no: EM131814994

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