If the Operation Is Low Cost and High Utilisation and the Market

question 32

Multiple Choice

If the operation is low cost and high utilisation and the market requirements are predictable with few changes, that is:

• A) Match
• B) Mismatch

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Definitions:

Manufacturing Overhead

Costs associated with the production process that are not directly traceable to a specific product, such as utilities and factory maintenance.

Cost of Goods Sold

The costs incurred directly from manufacturing the goods a company sells.

Overapplied

A situation where the allocated overhead costs in accounting exceed the actual overhead costs incurred.

Underapplied

In cost accounting, it describes a situation where the allocated overhead costs are less than the actual overhead costs incurred.