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 $30 per labor hour.
Nichols' management is considering to implement ABC system because ________.
Definitions:
Dendrite Growth
The process by which neurons develop dendrites, branching extensions that receive synaptic inputs from other neurons.
Shaping
A method of behavior training in which successive approximations toward a desired behavior are reinforced.
Extension
An anatomical movement where muscles increase the angle between parts of the body, such as straightening an arm or leg.
Synaptic Pruning
A natural process in brain development where extra neurons and synaptic connections are eliminated to increase the efficiency of neuronal transmissions.
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