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Dream Sewing Machine Company uses activity-based costing to account for its manufacturing process. Following are the four activities identified with the process and their budgeted costs for the month of December:
Dream expects to produce 1,000 sewing machines in the month of December. The sewing machines are expected to use 25,000 parts and require 15 setups. a) Compute the cost allocation rate for each activity. b) Compute the average manufacturing cost of each sewing machine assuming direct materials are $175 per machine.
The strategy the company, is it: to increase profit through eliminating the perverse incentive or no focus on the profit as the question asking to focus on other 3 perspective not the financial perspective.
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Compute the manufacturing cost per unit for each product produced in January. Suppose production will be reduced to 30,000 units in February. Speculate as to whether the unit costs in February will most likely be higher or lower than unit costs in ..
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