In Relation to Product Costing the Indirect Cost Rate Is

question 50

Multiple Choice

In relation to product costing the indirect cost rate is:

• A) the rate used to assign indirect costs to the cost object
• B) added to direct costs to calculate the full product cost
• C) the input or activity that causes changes in total costs for a cost object
• D) the method used to allocate the costs of each support department to the operating departments

---

Definitions:

Sales Mix

The proportion of different products or services that a company sells, intended to maximize profitability.

Relevant Range

The relevant range refers to the range of activity or volume over which the assumptions about variable and fixed cost behaviors hold true for management decision-making purposes.

Direct Materials

Raw materials that can be directly traced to the manufacturing of a product and are a part of the final product.

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business, such as costs for raw materials or production.