If a Company Chooses to Allocate Overapplied or Underapplied Overhead

question 152

Multiple Choice

If a company chooses to allocate overapplied or underapplied overhead to all the accounts that contain applied overhead, which of the following is not a step in the process?

• A)Add the ending balances in all the accounts.
• B)Calculate the percentage of each to the total.
• C)Multiply each percentage by the underapplied or overapplied amount.
• D)Divide the amount of overapplied or underapplied by three.

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Definitions:

Balanced Scorecard Approach

A strategy performance management tool that views an organization from four perspectives: financial, customer, process, and learning and growth.

Financial Measures

Quantitative metrics used to gauge a company's performance, financial health, and results over a specific period.

Income Statements

Financial statements that summarize a company's revenue, expenses, and profits over a specific period of time.

Standard Cost

A predetermined cost of manufacturing, delivering, or producing goods or services under normal conditions.