In Applying Costs Using a Predetermined Overhead Rate, the Most

question 88

Multiple Choice

In applying costs using a predetermined overhead rate, the most common allocation base is generally

• A)direct labour hours.
• B)direct materials used.
• C)indirect labour hours.
• D)indirect materials used.

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Definitions:

Cash Disbursements

Payments made in cash or cash equivalents, often tracked in a ledger to manage cash flow.

Selling and Administrative Expense Budget

A detailed plan outlining the expected selling and administrative expenses for a specific period, usually contributing to the master budget.

Budgeted Sales

Sales levels projected or planned for a future period.

Manufacturing Overhead Budget

A detailed plan that estimates all expected indirect production costs except for direct labor and direct materials.