The Two Main Advantages of Using Predetermined Factory Overhead Rates

question 58

Multiple Choice

The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost information and to:

• A)Simplify the accounting process.
• B)Provide cost information on a timely basis.
• C)Insure transmission of correct data.
• D)Extend the useful life of the cost data.
• E)Adjust for variances in data sources.

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Definitions:

Union Wages

Wages that are negotiated by labor unions on behalf of their members, often resulting in higher pay and better benefits than non-union wages.

Employment Decline

A reduction in the number of jobs or the rate of employment in a particular sector or economy.

Elastic Demand

A state in which the quantity demanded of a product is highly responsive to changes in its price.

Accountant Wages

The compensation, including salary and benefits, paid to accountants for their professional services.