Administrative Costs Are Currently Split Equally Among 4 Different Product

question 33

Multiple Choice

Administrative costs are currently split equally among 4 different product lines at WDT Company.To encourage the managers of each of the product lines to implement a new material waste policy aimed at reducing materials used in manufacturing, which of the following would best achieve this goal?

• A)Allocating administrative costs based on the cost per unit of materials used in production.
• B)Allocating administrative costs based on the number of labor hours used in manufacturing.
• C)Allocating administrative costs based on the amount of scrap produced from manufacturing.
• D)Allocating administrative costs based on the speed of production.

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Definitions:

Financial Analysts

Professionals who evaluate investments, economic trends, and financial statements to help businesses and individuals make informed financial decisions.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a firm, as reported in the cash flow statement.

Accounts Receivable

Funds that customers owe to a business for products or services that have been provided but for which payment has not yet been received.

ACP

An abbreviation that can refer to various terms; without a specific context, it's too broad to define accurately.