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Essay text:
Functional based costing, also known as traditional based costing, allows a company to allocate indirect costs to the product using an allocation base such as direct labor hours or machine hours (Hilton, Maher, & Selto, 2006).
Hugh Company Case 4.64-
4.64 (120 min) Choice of cost systems
a. Job costs using current cost system
Current cost system
Budgeted overhead…….. $300,000,000
Budgeted labor hours…..
Employees……………… 1,000
Hours per year………… 2,000
Total labor hours……… 2,000,000
Budgeted overhead rate $ 150 per labor hour
Job Labor hours Materials Overhead* Total cost
1 22...
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