Which of the Following Approaches Allocates Overhead by Multiplying an Actual

question 78

Multiple Choice

Which of the following approaches allocates overhead by multiplying an actual overhead rate × actual activity?

• A) Actual costing.
• B) Normal costing.
• C) Regression costing.
• D) Standard costing.

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Definitions:

Job Cost

The total cost associated with completing a specific job, including materials, labor, and overhead.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, calculated before the period begins based on estimated costs and activity levels.

Machine-Hour

A unit of measure representing the operation of a machine for one hour.

Unit Product Cost

The cost associated with producing a single unit of a product, encompassing materials, labor, and overhead.