To Develop a Cost Allocation Rate for Overhead, Normal Costing

question 23

Multiple Choice

To develop a cost allocation rate for overhead, normal costing uses:

• A) Actual costs and the actual volume of the allocation base
• B) Estimated costs and estimated volumes of the allocation base
• C) Actual costs and estimated volumes of the allocation base
• D) Estimated costs and actual volumes of the allocation base

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Definitions:

Push-Based Strategy

A push-based strategy in supply chain management involves forecasting demand and producing goods ahead of customer orders, pushing them through the distribution channels to the end consumers.

Lean Production

A manufacturing methodology focused on minimizing waste and maximizing value by optimizing processes, resources, and customer satisfaction.

Anticipation of Demand

The process of forecasting future customer demand using historical data and trend analysis to plan and manage supply chain operations efficiently.