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:

Vertical Integration

The involvement by a company in more than one of the activities in the entire value chain from development through production, distribution, sales, and after-sales service.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Supplier

A supplier is a person or company that provides goods or services to another entity, typically involved in the supply chain.

Traceable Fixed Costs

Fixed costs that can be directly associated with a specific cost object, such as a product, department, or project, and disappear if the cost object is eliminated.