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Author Question: Aqua Company produces two products-Alpha and Beta. Alpha has a high market share and is produced in ... (Read 65 times)

kamilo84

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Aqua Company produces two products-Alpha and Beta. Alpha has a high market share and is produced in bulk. Production of Beta is based on customer orders and is custom designed. Also, 55% of Beta's cost is shared between design and setup costs, while Alpha's major portions of costs are direct costs. Alpha is using a single cost pool to allocate indirect costs. Which of the following statements is true of Aqua?
◦ Aqua will overcost Beta's direct costs as it is using a single cost pool to allocate indirect costs.
◦ Aqua will undercost Alpha's indirect costs because alpha has high direct costs.
◦ Aqua will overcost Alpha's indirect costs as it is using a single cost pool to allocate indirect costs.
◦ Aqua will overcost Beta's indirect costs because beta has high indirect costs.


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Marked as best answer by kamilo84 on Mar 6, 2021

helenmarkerine

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kamilo84

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Reply 2 on: Mar 6, 2021
YES! Correct, THANKS for helping me on my review


Kedrick2014

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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