Cost Model Versus Revaluation Model Versus Fair Value Model

question 10

Essay

Cost model versus revaluation model versus fair value model
For each of the following types of assets, indicate with an "x" which of the three models: cost model (CM), revaluation model (RM), and/or fair value model (FVM) a company can choose, given international and private enterprise standards, to account for its property, plant, and equipment assets after acquisition.

---

Definitions:

Overapplied Overhead

A situation in which the allocated manufacturing overhead cost is greater than the actual overhead incurred.

Job-order Costing

An accounting method that assigns costs to specific jobs or batches, useful for customized orders or distinct products.

Direct Labor

The wages and other compensation for employees who are directly involved in the production of goods or services.

Manufacturing Overhead

All manufacturing costs that are not directly attributable to a product’s production, such as indirect materials and labor.