How much of the ten million cost should be allocated

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Reference no: EM132809243

Assume that the direct cost per phone is:

Direct material: $40

Direct labour: $25

Assume that the factory where the phones are made is also used to make tablets (e.g. i pads). The annual costs of the factory (rent, insurance, maintenance etc) are $10,000,000.

Problem 1: How much of this $10 million cost should be allocated to each phone made?

Reference no: EM132809243

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