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The Good Sounds Corp. is attempting to get a better estimate of the cost of their products. As a first step, they are attempting to allocate overhead by defining three activity cost pools and three corresponding cost drivers. The believe that the cost drivers of each of these pools correlate with the costs of that activity pool. The estimated overhead costs and activity are given as follows:
What amount of overhead will be applied to CD Players?
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What is inventory shrinkage? Please give an example or 2 and include how to minimumize shrinkage for that example.
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