1. The most effective basis for cost allocation exists when cause and effect relationship can...
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1. The most effective basis for cost allocation exists when cause and effect relationship can be determined. T/F?
2. Walmart Inc. manufactures lotion that sell for $15.00 per unit. The business had no beginning inventory.
The following data summarized the operations for the period:
| Units sold | 6,000 |
| Units produced | 7,500 |
| Costs: | |
| Variable factory overhead per unit | $5.00 |
| Fixed factory overhead - total | $27,000 |
| Variable administrative per unit | $2.00 |
| Fixed administrative - total | $6,000 |
Problem 2.1
Using direct costing, the operating income is:
$33,000
$38,400
$48,000
$15,000
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