Question:
Consider two types of boom boxes made by Teledor, Inc. One boom box is complex to make and is produced in many batches. The other boom box is simple to make and is produced in few batches. Suppose that Teledor needs the same number of machine-hours to make each type of boom box and that Teledor allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the boom boxes be miscosted? Briefly explain why.