Should Be Used to Allocate Variable Costs

question 73

Multiple Choice

should be used to allocate variable costs.

• A) Budgeted unit rate x actual units used
• B) Budgeted unit rate x total budgeted units planned to be used
• C) Actual unit rate x total budgeted units planned to be used
• D) Actual unit rate x actual units used

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Definitions:

Materials Labor

Generally refers to the workforce involved in the handling, preparation, and processing of materials in manufacturing.

Overhead Costs

Indirect costs required to run a business but cannot be directly attributed to a specific product or service.

Period Costs

Expenses that are not directly tied to the production process and are typically recorded as expenses in the period in which they are incurred.

Inventoriable Costs

Costs that are directly associated with the production of goods and are capitalized as inventory, to be expensed as the goods are sold.