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Activity Based costing2

Activity Based costing2 - SI cfw collaborative peer-led...

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This material is produced by the SI Program at Arizona State University student success .asu.edu { collaborative peer-led structured group study SI HCI Pharmaceuticals manufactures an over-the-counter allergy medication called Breathe . They are trying to win market share from Sudafed and Tylenol. HCI Pharmaceuticals has developed several different Breathe products tailored to specific markets. For example, the company sells large commercial containers of 1,000 capsules to health-care facilities, and travel packs of 20 capsules to shops in airports, train stations, and hotels. HCI Pharmaceuticals’ controller has just returned from a conference on ABC, and wants to develop an ABC system for the Breathe product line. She identifies the following activities, related costs, and cost allocation bases. Activity Estimated Indirect Activity Costs Allocation Base Estimated Quantity of Allocation Base Materials handling $190,000 Kilos 19,000 kilos Packaging $400,000 Machine hours 2,000 hours Quality assurance $112,500 Samples 1,875 samples
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