(L.OBJ. 1) Product costing in an ABC system [15-20 min] The Anal Manufacturing Company...

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

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

Requirements

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

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

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