In Terms of Allocating Fixed Overhead Cost to Products,generally Accepted

question 57

Multiple Choice

In terms of allocating fixed overhead cost to products,generally accepted accounting principles:

• A)Require that such allocations be based on normal capacity.
• B)Allow for the use of either practical capacity or theoretical capacity.
• C)Don't apply since the resulting data are used only internally (for control purposes).
• D)Specify only that such costs be "reasonably allocated" to outputs.

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Definitions:

Discount Sale

A sales promotion technique where products or services are sold at a price lower than their original price to stimulate demand.