Why Is It Necessary to Estimate the Annual Overhead Costs

question 142

Multiple Choice

Why is it necessary to estimate the annual overhead costs and annual operating activity when calculating the predetermined overhead rate?

• A)Cost benefit analysis indicates that it is too expensive to gather actual costs.
• B)The predetermined overhead rate is only used for internal reporting, and does not need to equal the higher standards required for external reporting.
• C)In order to obtain timely information, companies cannot wait for actual costs to be determined.
• D)All of the above.

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Definitions:

Triads

A sociological term that refers to a group of three individuals in social situations, noted for the complexity and stability dynamics different from dyads (groups of two).

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Classifications or groupings of items or concepts that share common characteristics, used to organize and simplify information or data.

Bulimia Nervosa

An eating disorder characterized by episodes of binge eating followed by inappropriate compensatory behaviors such as purging, fasting, or excessive exercise.

Binge-Purge Cycle

A pattern of disordered eating characterized by episodes of excessive food consumption followed by compensatory behaviors like vomiting.