Olivia is an accountant for Pink, Inc., a small factory that…
Questions
Oliviа is аn аccоuntant fоr Pink, Inc., a small factоry that manufactures disposable gloves and slippers. Previously, Pink had been utilizing a traditional costing system to account for its budgeted Manufacturing Overhead (MOH) costs. After a few years, Olivia recommended that the company opt for Activity-Based Costing (ABC) as that would afford it the opportunity to better account for the costs. She has determined that Pink had three key activities to use for MOH budgeted costs: Materials sorting, garment inspection, and materials management wages. She has collected the following data:Materials sorting: $38500 (3500 sorting hours)Garment inspection: $55300 (4608 inspection hours)Materials management wages: $18700 (13300 management hours)If gloves used 3100 inspection hours, then what amount of inspection MOH costs will be allocated to gloves?
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