Swifty Inc. has two types of handbags: standard and custom. The controller has decided to...
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Accounting
Swifty Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has 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 company's operations. Total estimated overhead costs are $299,100. Overhead cost allocated to the machining activity cost pool is $192.000, and $107,100 is allocated to the machine setup activity cost pool. Determine the difference in allocation between the two approaches


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