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Help Save &E Che Anticipated volume (units) Direct-labor cost per unit 10 The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the n number of setups, machine hours, and outgoing shipments, which are the activities' three respective cost drivers, follow Setups Machine hours Outgoing shipments 152 52,889 112 74,250 156 127,e5e The firm's total overhead of S16,770,600 is subdivided as follows: $10,062,360, and product shipping, $3,049,200. manufacturing setups, $3,659,040, machine processing. Required: 1. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using the companys current overhead costing procedures 2 Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing. 3. Is the cost of the Type A storage cabinet overstated or understated (.e, distorted) by the use of machine hours to allocate total manufacturing overhead to production? By how much? 4. Assume that the current selling price of a Type A storage cabinet is $38700 and the marketing manager is contemplating a $43 discount to stimulate volume. Is this discount advisable? Prey 1 of 10Next>

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