Adjustments Are Required

question 95

Multiple Choice

Adjustments are required:

• A)because some costs expire with the passage of time and have not yet been recorded.
• B)when the company's profits are below the budget.
• C)when expenses are recorded in the period in which they are earned.
• D)None of these answer choices are correct.

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Definitions:

Predetermined Overhead Rate

A calculated rate used to assign overhead costs to products or services, based on estimated or budgeted overhead expenses and activity.

Unit Product Costs

The calculated cost to produce one unit of product, including direct materials, labor, and overhead.

Predetermined Overhead Rate

The rate calculated before the accounting period begins, used to allocate overhead costs to products or job orders based on a consistent activity base.

Machine-Hours

A measure of production output or activity level, representing the total hours that machinery is operating over a specific period of time.