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Dachshund, Inc. produces fancy, high-end dog kennels and runs. They have two primary units- a Single model and a Multi-Pet model. You are Dachshunds controller, and you have decided to use a plant-wide overhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the companys operations: Single Model Multi-Pet Model Direct labor costs $75,000 $150,000 Machine hours 2,000 2,000 Setup hours 200 800 Total estimated overhead costs are $450,000. Overhead cost allocated to the machining activity cost pool is $270,000 and $180,000 is allocated to the machine setup activity cost pool. IN EXCEL: (a) Compute the overhead rate using the traditional (plantwide) approach. (b) Compute the overhead rates using the activity-based costing approach. (c) Determine the difference in allocation between the two approaches. WRITE A MEMO: to the president in a maximum of 500 words in which you explain: (F) What is the difference in allocation between two activity cost pools and three activity cost pools? Is the difference in allocation worth using the third activity cost pool? Question F is the one I need a little help with????

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