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Company A uses the Absorption Costing Technique. The overhead absorption rate using the direct labor hours is 3 and the overhead absorption rate using the
Company A uses the Absorption Costing Technique. The overhead absorption rate using the direct labor hours is 3 and the overhead absorption rate using the direct machine hours is 5. Product Basic is produced by Company A and requires 4 hours of labor and 1.5 hours of machine. Considering this information, which of the following statements is true? Select one: a. One hour of machine is less costly than one hour of labor in terms of overheads. b. The overhead absorption rate is calculated only when using the marginal cost technique. C. Product basic should be sold for a price larger than 19.5. d. None of the answers is true
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