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Question - Yemesi, Inc.'s budgeted income statement for 2020 follows:
Sales (80,000 units) $360,000
Less:
Direct materials $128,000
Direct labor 36,000
Variable overhead 32,000
Fixed overhead 10,000
Fixed selling & admin expenses 12,000 218,000
Income before taxes $142,000
Required - How much income before taxes would appear on a flexible budget for 86,000 units?
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This individual assignment is based on the TerraCycle Inc.
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A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.
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