Which Statement Is True of Bottom-Up Estimates

question 72

Multiple Choice

 Which statement is true of bottom-up estimates?

• A) They are based on the actual cost of a previous, similar project.
• B) They are also known as parametric estimating.
• C) They are most accurate when they involve large, extensive work items.
• D) They are time-intensive and expensive to develop.

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Definitions:

Cost of Completed Jobs

The total expenses (both direct and indirect) associated with the manufacturing process that have been used up or incurred in completing specific jobs.

Underapplied Manufacturing Overhead

Refers to the situation where the actual manufacturing overhead costs exceed the overhead costs applied to goods produced during a period.

Overapplied Manufacturing Overhead

The condition wherein the overhead allocated during the production process exceeds the actual overhead costs incurred.

Predetermined Overhead Rate

This rate is calculated before a period begins and is used to allocate overhead costs to products based on a chosen activity base.