To Be Consistent with the Historical Cost Principle, Overhead Costs

question 46

Multiple Choice

To be consistent with the historical cost principle, overhead costs incurred by an enterprise constructing its own building should be

• A) allocated on the basis of lost production.
• B) eliminated completely from the cost of the asset.
• C) allocated on an opportunity cost basis.
• D) allocated on a pro rata basis between the asset and normal operations.

---

Definitions:

Posture Change

The act of altering the position of one's body, often to improve comfort or avoid health issues related to prolonged static positions.

Memorizing

The process of committing something to memory for easy retrieval and recall.

Extemporaneous Presentation

A speech or presentation delivered with preparation but without a full script, allowing for some spontaneity.

Visual Aids

Tools like charts, diagrams, or videos used to enhance understanding or retention of information.