When Calculating a Departmental Overhead Rate, What Should the Numerator

question 220

Multiple Choice

When calculating a departmental overhead rate, what should the numerator be?

• A)Total estimated amount of the departmental allocation base
• B)Total estimated departmental overhead cost pool
• C)Total estimated amount of manufacturing overhead for the factory
• D)Actual quantity of the departmental allocation base used by the job

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Definitions:

Schematic Diagram

illustrates the elements of a system using abstract, graphic symbols rather than realistic pictures, emphasizing connections and relationships.

Crossover Point

The crossover point is the level at which two different options or strategies result in the same outcome or cost, often used in decision-making processes.

Fixed Costs

Fixed charges that are unaffected by changes in production or sales volumes, including rental fees, wages, and insurance costs.

Variable Costs

Expenses that change in proportion to the activity or volume of a business operation, such as materials and labor.