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Jason s Outdoors manufactures two products: snow skis and water skis. Jason s managerial accountant suspects that product cost distortion through factory overhead allocation is
Jasons Outdoors manufactures two products: snow skis and water skis. Jasons managerial accountant suspects that product cost distortion through factory overhead allocation is occurring where snow skis are underpriced and water skis are overpriced. Based on this information, which of the following statements is true?
a Snow skis likely consumed a larger proportion of factory overhead than was allocated.
b Jasons should expand production of snow skis.
c Jasons accountant should ignore the cost distortions.
d Jasons concludes that it is applying its factory overhead properly.
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