Dye CoUses a Job Cost System and Predetermines a Factory Overhead

question 88

Multiple Choice

Dye Co.uses a job cost system and predetermines a factory overhead rate based on the amount of expected fixed costs and expected volume.At the conclusion of the fiscal year, overapplied overhead could be explained by which of the following?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Actual Overhead

The real, incurred costs of running a production or service operation, excluding direct labor and direct materials.

Activity-Based Costing

A pricing strategy that pinpoints various tasks within a company and allocates the expenses of each task to every product and service based on their specific usage.

Overhead Rate

A calculation used to allocate indirect costs to produced goods or services, often based on labor hours, machine hours, or direct labor costs.

Cost of Services Account

An accounting category that includes all direct costs associated with the delivery of services, such as labor and materials.