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:
Bay Of Pigs
The site of a failed invasion of Cuba in 1961 by Cuban exiles with support from the US, aimed at overthrowing Fidel Castro's government.
CIA
The Central Intelligence Agency, a civilian foreign intelligence service of the federal government of the United States, tasked with gathering, processing, and analyzing national security information.
Fulgencio Batista
A military officer and politician who served as the elected president and dictator of Cuba before being overthrown by the Cuban Revolution.
Complete Failure
A situation or attempt that utterly fails to meet its goal or objective, resulting in no successful outcome.
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