The Examination of Business Processes to Identify Incremental Changes That

question 131

Multiple Choice

The examination of business processes to identify incremental changes that may reduce operating costs is referred to as

• A)variance analysis.
• B)incremental analysis.
• C)process improvement.
• D)total quality management.

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Definitions:

Predetermined Overhead Rate

This is a rate used to apply manufacturing overhead to products or job orders and is established in advance based on estimated costs and activity levels.

Raw Materials Inventory

The total cost of all the materials that are used to make a product but have not yet been used in the manufacturing process.

Predetermined Overhead Rate

A rate calculated at the beginning of a period for assigning overhead cost to products or activities, based on estimated costs and activity levels.

Applied Overhead

The portion of overhead costs allocated to individual jobs or products based on a predetermined rate.