Specialised Manufacturing Company (SMC) is a large firm that manufactures large quantities of a single product.

We-do-everything Manufacturing Company (WMC) is a large firm which manufactures large quantities of a diverse range of products.

Which of the following statements about SMC and WMC's allocation of indirect costs to their product(s) is/are likely to be true?

1. It would be equally challenging to do so accurately for WMC and SMC.

2. SMC should choose its indirect cost allocation base(s) carefully when allocating indirect cost to its product as this would have a significant impact on the amount of indirect cost that gets allocated to its product.

3. WMC should choose its indirect cost allocation base(s) carefully when allocating indirect cost to its products as this would have a significant impact on the amount of indirect cost that gets allocated to each of its products.

Group of answer choices

A. Statement 1 only

B. Statement 2 only

C. Statement 3 only

D. Statement 1 and 2 only

E. Statement 1, 2 and 3