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:
Bipolar Disorder
A psychological disorder defined by significant shifts in mood, including periods of intense euphoria (mania or hypomania) and profound sadness (depression).
Sodium Ions
Positively charged ions of sodium, essential for the electrical signals in the nervous system and for regulating body fluids.
Norepinephrine
A neurotransmitter and hormone involved in the body's fight or flight response; it affects mood, attention, and other bodily processes.
Calcium Ions
Positively charged atoms of calcium that play essential roles in biological processes such as bone formation, muscle contraction, and blood clotting.
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