A
Calculate the plant-wide cost driver rate and use this rate to allocate the overhead costs to product and calculate the gross margin for each product and the total gross margin.
B
Recalculate the cost driver based on the new total direct labor hours remaining in the plant and use this amount to allocate the overhead costs to the remaining three products and calculate the gross margin for each product and total gross margin.
C
Leave any product that is unprofitable with the revised cost assignment and repeat this process by removing any unprofitable product at every stage.
D
Explain the situation in Y and recommend how can avoid this situation.
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Management Accounting: Information For Decision-making And Strategy Execution, Student Value Edition (6th Edition)
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