The Following Information Is Available for the Downtown Furniture Company

question 41

Multiple Choice

The following information is available for the Downtown Furniture Company which produces two types of tables. Management feels that the fixed manufacturing costs should be allocated based on direct labor costs and fixed administrative costs should be allocated based on units sold. The rate at which fixed manufacturing costs which should be allocated is: (rounded)

• A) $1.05 per direct labor dollar
• B) $.95 per direct labor dollar
• C) $1.34 per direct labor dollar
• D) $3.08 per direct labor dollar

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Definitions:

External Locus

A perspective that attributes success and failure to external factors and circumstances beyond one's personal control.

Identity Formation

The process during which individuals explore, question, and eventually commit to various aspects of their identity, including personal, social, and cultural dimensions.