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Cost Accounting

40. Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?
A) Machine-hours.
B) Direct labor-hours.
C) Number of orders processed.
D) Cost of materials purchased.

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C - Number of orders processed

The activity should be such that the costs incurred are related to the ...

Solution Summary

The solution explains how to decide the cost base to use for cost allocation.