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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