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ruskin ruskin
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6 years ago
The new manager of the insurance division does not understand how the company can have so many overhead rates for assigning costs to the activities of the company's life insurance underwriters. There is one rate schedule for average assignable costs when agents write standard policies. There is another rate schedule which the agents must complete when they write special policies, and these policies are costed out differently from those that are categorized as standard policies.

Required:
a.   Why might the company have different costing systems with different overhead rates for the standard and specialized policies?
b.   Which rate (standard or specialized) would cross-subsidize the other if the company used only one set    of overhead rates for costing its policies?
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
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MunihasenMunihasen
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ruskin Author
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6 years ago
Correct Slight Smile TY
TheMoffattMan
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riptide
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2 hours ago
Thank you, thank you, thank you!
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