A Predetermined Indirect Cost Rate Cannot Be Calculated by Using

question 55

Multiple Choice

A predetermined indirect cost rate cannot be calculated by using

• A)machine hours.
• B)indirect labour costs.
• C)direct labour costs.
• D)direct labour hours.

---

Definitions:

May

The fifth month of the year in the Gregorian calendar.

Labor Efficiency Variance

The difference between the actual labor hours used in production and the standard hours expected, multiplied by the standard labor rate.

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the standard or expected wage rate, multiplied by the total hours worked.

Standard Amount

A benchmark or norm set for the quantity or cost of inputs in producing a specific product or in carrying out a process.