Which of the Following Is Not Normally a Method of Allocating

question 38

Multiple Choice

Which of the following is not normally a method of allocating overhead costs to products?

• A) Cost per machine hour
• B) Cost per direct labour dollar
• C) Cost per direct labour hour
• D) Cost per unit sold

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Definitions:

Specific Identification Formula

A method used in inventory accounting that tracks the cost of specific items purchased and sold.

Low-Unit-Cost Items

Items or inventory that individually have a low value or cost but may collectively represent a significant value.

Inventory Cost Formula

An equation used to calculate the cost of ending inventory, taking into account the cost of goods sold, purchases, and beginning inventory, enabling accurate financial reporting and analysis.

Inventory Cost Formula

A method utilized for valuing the cost of goods sold and ending inventory, often using techniques such as First-In, First-Out (FIFO) or Last-In, First-Out (LIFO).