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2. The Braintree Furniture Company manufactures two lines of furniture: an upscale, handcrafted line called Richleau, produced in small quantities, and a mass-produced, inexpensive line
2. The Braintree Furniture Company manufactures two lines of furniture: an upscale, handcrafted line called Richleau, produced in small quantities, and a mass-produced, inexpensive line called Particleboard. Both lines are made in the same factory. Richleau is very labor intensive relative to Particleboard. Braintree switched from a traditional costing method that allocated overhead based on direct labor hours to an activity-based costing system. Under activity-based costing, the amount of overhead allocated to Richleau will be (A) higher than under the traditional costing method. (B) lower than under the traditional costing method. (C) either higher or lower than under the traditional costing method, depending on the underlying economics of the business. (D) lower than under traditional costing, as long as activity-based costing is implemented to provide more accurate cost information
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