Required: (a) Calculate the cost per unit for FREDs and MARTHAs using the conventional approach when calculating overhead (b) Using the same pricing approach as above(120% of total manufacturing cost) calculate the price that would be charged for FREDs and MARTHAs using Activity Based costing. (c ) Based on your calculations using Activity Based costing explain how the conventional volume based approach to allocating overhead has lead to mispricing the products.
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