Comparisons Can Be Made on Each of the Following Bases

question 185

Multiple Choice

Comparisons can be made on each of the following bases except

• A) industry averages.
• B) intercompany basis.
• C) intracompany basis.
• D) All of these answer choices are basis for comparison.

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Definitions:

Underapplied

A situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred, leading to underestimation of product costs.

Overapplied

A condition where the allocated amount of indirect costs exceeds the actual amount incurred.

Variable Overhead Efficiency

The variance indicating the efficiency with which a variable overhead cost is incurred in relation to an activity level, such as machine or labor hours.

Rate Variance

The difference between the actual rate paid for an item or service and the expected (standard) rate, used in budgeting and cost control.