Nichols Inc. manufactures remote controls. Currently the company uses a plant-wide rate for allocating manufacturing overhead. The plant manager is considering switching-over to ABC costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows:
The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $20 per labor hour.
What are the indirect manufacturing costs per remote control assuming an activity-based-costing method is used and a batch of 10 remote controls are produced? The batch requires 100 parts, 5 direct manufacturing labor hours, and 3 minutes of inspection time.
Definitions:
Paralanguage
The non-verbal elements of communication used to modify meaning and convey emotion, such as tone of voice, loudness, and pitch.
Nonverbal
Communication without using spoken language, including gestures, facial expressions, body language, and other visual cues.
Transactional Model
A communication framework suggesting that interactions are simultaneous and reciprocal among communicators.
Stimulated
The state of being aroused, activated, or energized by external or internal factors.
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