Essay
The controller for Ocean Sailboats Inc., a company which uses an automated process to make sailboats, established the following overhead cost pools and cost drivers: A recent order for sailboats used:
Required:
1. What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system?
2. Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver?
3. Utilizing ABC, how much total overhead is assigned to the order?
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