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Activity: Manufacturing Overhead Cost Allocation

By completing this assignment, you will learn how to determine the cost of manufactured products using the traditional department-based method and the activity-based costing (ABC) method of allocating a business’ manufacturing overhead costs. After completing this assignment, you will also be able to identify:

  • The reasons that the traditional method of allocating manufacturing overhead costs may lead to distortions in the computed unit costs of alternative products when a business manufactures multiple products using shared facilities and other resources and
  • The adverse effects such distortions may have on management’s decisions.

Please use the file entitled Topic2Template for this assignment.

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