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ABC versus traditional costing. Motorola Corporation manufactures cell phones and pagers in a particular factory. Assume that overhead costs are currently allocated using direct labor hours, but the controller has recommended an activity-based costing system using the following data:

Activity Level

Activity Cost Driver Cost Cell Phones Pagers

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Production Setup
Number of Setups
Material Handling and Requisition
Number of Parts
Packaging and Shipping
Number of Units Shipped

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