Which of the Following Is Not a Correct Pairing of Estimated

question 120

Multiple Choice

Which of the following is not a correct pairing of estimated costs and its related cost driver?

• A) Fuel expense for a delivery truck; miles driven.
• B) Heating expense for a building; temperature to be maintained in the building.
• C) Product design cost; number of design elements.
• D) Sustainability cost in a manufacturing plant; machine-hours.

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Definitions:

Departmental Overhead Rates

Rates used to allocate overhead costs to specific departments based on predetermined criteria, often used for cost accounting purposes.

Job Cost Sheet

A document that tracks the cost associated with a specific job, including materials, labor, and overhead.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or cost objects, calculated before the period begins based on estimated costs and activity levels.

Manufacturing Overhead

This refers to all of the indirect costs associated with the production process, such as utilities, maintenance, and salary of supervisors.