The Budgeted Overhead Costs for Standard Hours Allowed and the Overhead

question 30

Multiple Choice

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

• A)for both variable and fixed overhead costs.
• B)only when standard hours allowed is less than normal capacity.
• C)for variable overhead costs.
• D)for fixed overhead costs.

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Definitions:

Materials Used

The cost of raw materials and supplies that are consumed in the manufacturing process to produce goods.

First-In, First-Out Method

An inventory valuation method assuming that the first items purchased or produced are the first ones sold, affecting the cost of goods sold and inventory valuation.

Conversion Cost

The total cost of converting raw materials into finished goods, generally comprising labor and overhead expenses.

Materials Cost

The expense incurred to obtain materials required for the production of goods or services.