The Two Broad Categories of Differences That Result from Determining

question 35

Multiple Choice

The two broad categories of differences that result from determining financial income and taxable income are

• A)temporary differences and originating differences.
• B)temporary differences and reversing differences.
• C)temporary differences and permanent differences.
• D)permanent differences and deferred differences.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, depreciation of equipment, and salaries of maintenance staff.

Plantwide Overhead Rate

This is a single overhead rate calculated by dividing all of a plant's manufacturing overhead costs by its total activity base, such as labor hours or machine hours, used across the entire factory.

Direct Labor-Hour

A unit of measure representing the labor time expended by workers directly involved in the manufacturing process, often used in cost accounting.

Activity-Based Costing

is a costing methodology that assigns overhead and indirect costs to specific products or services based on their consumption of resources.