Cost allocation is in the process of spreading or assigning indirect costs to a finished product. Assume
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Question:
Cost allocation is in the process of spreading or assigning indirect costs to a finished product. Assume that the cost of an overhead item is $100. There are 3 products that benefit from this overhead item and during this period 10 units of A, 20 units of B, and 70 units of C are produced.
If the allocation of the overhead expense is based on units of production, which product will absorb the most of the $100?
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