Departmental Overhead Rates May Not Correctly Assign Overhead Costs Due

question 351

Multiple Choice

Departmental overhead rates may not correctly assign overhead costs due to:

• A) the use of direct labor hours in allocating overhead costs to products rather than machine time or quantity of materials used.
• B) the high correlation between direct labor-hours and the incurrence of overhead costs.
• C) overreliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production.
• D) difficulties associated with identifying cost pools for the first stage of the allocation process.

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Definitions:

Cultural Changes

Transformations in the beliefs, practices, customs, and values of a society or community over time.

Biological Changes

Alterations in the genetics or physiology of living organisms, which can be caused by environmental factors, adaptation, or evolutionary processes.

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Prehistoric remains of Australopithecus, an early genus of hominins known for bipedal locomotion and a significant role in human evolutionary history.

Lucy

The common name given to the Australopithecus afarensis skeletal remains discovered in Ethiopia in 1974, which are among the oldest and most complete hominin fossils found to date.