Question
A company has computed an indirect allocation rate of 50% based on direct wages for a quality control department, and an 80% allocation rate (based
A company has computed an indirect allocation rate of 50% based on direct wages for a quality control department, and an 80% allocation rate (based also on direct wages) to cover indirect costs in the sales and administration department. Both indirect departments have 30% variable costs. Direct wages are NOK 10 000, and are considered variable.What is correct?
With a sales price of NOK 30 000, the contribution is NOK 16 100, if direct wages are considered variable.
With a sales price of NOK 40 000, the contribution is NOK 16 100, if direct wages are considered variable
With a sales price of NOK 35 000, the contribution is NOK 16 100, if direct wages are considered variable
With a sales price of NOK 25 000, the contribution is NOK 16 100, if direct wages are considered variable
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