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In order to deterime the way the new products use the company resources LeanOut managers declded to use a new system of allocating overhead, Activity Based Costing, or ABC. The data for the possible cost drivers are listed below: Protein Powder Traval ScalasDlet Bars Exorclse Videos Total Square feet occupied Moves Engineering hours Machine hours Direct labor dollars 2,500 150 300 8,000 $100,000 1,000 40 500 5,000 $180,000 700 10 120 400 $21,00o 2,500 300 1,620 6,200 $39,000 8000 625 3200 20000 $340,000 Based on the bahavlor of the sharod fixad costs, tha following aetlivitlas ware detorminad: llowing activitles wara dotorminad: Activitles Insuring the Plant and the Plant Equipment and Paying Plant Taxes and Recording Depreciation Recelving and Moving Materials Designing the Product Providing Power and Maintaining Equipment Managing the Plant* Total Cost $960,000 $250,000 $400,000 $300,000 $250,000 $2,160,000 Required: A. Find the Product Line Margins using ABC. B. Discuss the changes in the margins and what impact those changes might have on managers' decisions In order to deterime the way the new products use the company resources LeanOut managers declded to use a new system of allocating overhead, Activity Based Costing, or ABC. The data for the possible cost drivers are listed below: Protein Powder Traval ScalasDlet Bars Exorclse Videos Total Square feet occupied Moves Engineering hours Machine hours Direct labor dollars 2,500 150 300 8,000 $100,000 1,000 40 500 5,000 $180,000 700 10 120 400 $21,00o 2,500 300 1,620 6,200 $39,000 8000 625 3200 20000 $340,000 Based on the bahavlor of the sharod fixad costs, tha following aetlivitlas ware detorminad: llowing activitles wara dotorminad: Activitles Insuring the Plant and the Plant Equipment and Paying Plant Taxes and Recording Depreciation Recelving and Moving Materials Designing the Product Providing Power and Maintaining Equipment Managing the Plant* Total Cost $960,000 $250,000 $400,000 $300,000 $250,000 $2,160,000 Required: A. Find the Product Line Margins using ABC. B. Discuss the changes in the margins and what impact those changes might have on managers' decisions

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