Problem 17 - P17-1B Waves Galore, Inc. manufactures hair...

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P17-1B Waves Galore, Inc. manufactures hair curlers and blow-dryers. The handheld hair curler is Waves Galore's high volume product (80,000 units annually). It is a “large barrel,” 20-watt, triple-heat appliance designed to appeal to the teenage market segment with its glow-in-the-dark handle. The handheld blow-dryer is Waves Galore's lower-volume product (40,000 units annually). It is a three-speed, 2,000 watt appliance with a “cool setting” and a removable filter. It also is designed for the teen market. Both products require one hour of direct labor for completion. Therefore, total annual direct labor hours are 120,000, (80,000 + 40,000). Expected annual manufacturing overhead is $438,000. Thus, the predetermined overhead rate is $3.65 per direct labor hour. The direct materials cost per unit is $5.25 for the hair curler and $9.75 for the blow-dryer. The direct labor cost is $8.00 per unit for the hair curler and the blow-dryer. Waves Galore purchases most of the parts from suppliers and assembles the finished product at its Fargo, North Dakota plant. It recently adopted activity-based costing, which after this year- end will totally replace its traditional direct labor-based cost accounting system. Waves Galore has identified the following six activity cost pools and related cost drivers and has assembled the following information. Use of Cost
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Problem 17 - P17-1B Waves Galore, Inc. manufactures hair...

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