For Each of the Following Activities,indicate an Appropriate Allocation Base

question 195

Essay

For each of the following activities,indicate an appropriate allocation base:
$\begin{array}{|l|l|}\hline\text { Activity } & \text { Allocation Base } \\\hline \text { Warranty Services - Providing service } & \\\text { for defective products } & \\\hline \text { Setup - Setting up machines for } & \\\text { production } & \\\hline \text { Shipping - Shipping finished products } & \\\text { to customers } & \\\hline \text { Machining - Machine usage } & \\\hline \text { Purchasing - Purchasing raw materials } &\\\hline\end{array}$

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Definitions:

Material Purchases

The total cost of raw materials acquired for use in the production process.

Est. Cost of Goods Sold

An estimated figure representing the cost directly associated with the production of the goods sold by a company.

Selling Price

The amount of money a seller charges for a product or service.

Credit Sales

Transactions where goods or services are sold and payment is delayed, typically recorded as accounts receivable.