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Steven Garcia has been studying his department's profitability reports for the past six months. He...

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Accounting

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Steven Garcia has been studying his department's profitability reports for the past six months. He has just completed a managerial accounting course and is beginning to question the company's approach to allocating overhead to products based on machine hours. The current department overhead budget of $1,031,140 is based on 51,557 machine hours. In an initial analysis of overhead costs, Steven has identified the following activity cost pools. Steven Garcia is taking the next step in his exploration of activity-based costing and wants to examine the overhead costs that would be allocated to two of the department's four products. He has gathered the following budget information about each product. (a) Calculate the total overhead allocated to each component under the traditional method using machine hours as the overhead application base. (b) Calculate the total overhead allocated to each component under activity-based costing. (Round overhead rates to 2 decimal places, e.g. 5.27 and round final answers to 0 decimal places, e.g. 5,275.)

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