(L.OBJ. 1) Product costing in an ABC system [15—20 min] The Alright Manufacturing Compa...

(L.OBJ. 1) Product costing in an ABC system [15—20 min]

The Alright Manufacturing Company in Hondo, Texas, assembles and tests electronic components used in handheld video phones. Consider the following data regarding component T24:

The activities required to build the component follow:

Requirements

1. Fill in the blanks in both the opening schedule and the list of activities.

2. How is labor cost assigned to products under this ABC product costing system?

3. Why might managers favor this ABC system instead of Alright's older system, which allocated all conversion costs on the basis of direct labor?