In Calculating a Predetermined Overhead Rate a Recent Trend in Automated

question 18

Multiple Choice

In calculating a predetermined overhead rate a recent trend in automated manufacturing operations is to choose an activity base related to

• A) direct labor hours.
• B) indirect labor dollars.
• C) machine hours.
• D) raw materials dollars.

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Definitions:

Interest Due

The amount of interest that has been accrued and is payable on borrowings for a specified period.

Allowance Method

An accounting technique used to estimate and write off bad debts or accounts receivable that are not likely to be collected.

Bad Debts

Amounts owed to a company that are not expected to be collected, often recognized as an expense on the income statement.

Adjusting Entry

Journal entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.