When Computing the Predetermined Manufacturing Overhead Rate, Which Amount Below

question 98

Multiple Choice

When computing the predetermined manufacturing overhead rate, which amount below is most likely used in the numerator?

• A)direct labour hours
• B)estimated manufacturing overhead costs
• C)actual manufacturing overhead costs
• D)applied manufacturing overhead costs

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Definitions:

Assets And Liabilities

Resources owned and controlled by a business (assets) and obligations to transfer resources to another entity (liabilities).

Current Rate Method

An accounting technique used in currency translation where assets and liabilities are converted at the current exchange rate.

Exchange Rates

The value of one currency for the purpose of conversion to another, indicating how much one currency can be exchanged for another currency.

Functional Currency

The primary currency of the primary economic environment in which the entity operates, usually the local currency or the currency of the primary sales market.