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Develop an activity-based cost system for dakota office

Dakota Office Products Case Study

1. Why was Dakota's existing pricing system inadequate for its current operating environment?

2. Develop an activity-based cost system for Dakota Office Products (DOP) based on Year 2000 data. Calculate the activity cost-driver rate for each DOP activity in 2000.

3. Using your answer to Question 2, calculate the profitability of Customer A and Customer B.

4. What explains any difference in profitability between the two customers?

5. What are the limitations, if any, to the estimates of the profitability of the two customers?

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Accounting Basics: Develop an activity-based cost system for dakota office

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