In a Standard Cost System, Variable Overhead Is Applied

question 107

Multiple Choice

In a standard cost system, variable overhead is applied

• A) using actual direct labor hours.
• B) using budgeted indirect labor hours.
• C) using direct labor hours at practical capacity.
• D) using standard direct labor hours.
• E) All of these.

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Definitions:

Straight-Line

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.

Discontinued Item

A component of a company's operations that has been disposed of or is held for sale, and its earnings are separated out on the income statement.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes in the United States that allows faster write-offs of assets.

Straight-Line

A method of calculating depreciation of an asset, which allocates an equal amount of depreciation to each year of the asset's useful life.