Homework Answers
Option B is Right Answer.
Both the companies have almost same amounts of expenses so option A, C, D will not be true.
Now lets assume that the Manufacturing overhead is under applied by $10,000 by both the companies. And also assume that Fiden Inc allocates its under applied cost as 60% to COGS.
In this case COGS for Frump Inc will be $10,000
But for Fiden Inc it will be only $10,000*60% = $6,000
So adjusted COGS of Frump Inc will be higher than Fiden Inc
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