The Amount of Manufacturing Overhead Applied to a Particular Job

question 172

Multiple Choice

The amount of manufacturing overhead applied to a particular job is calculated as

• A)predetermined overhead rate x budgeted activity level of application base.
• B)predetermined overhead rate x actual activity level of application base.
• C)predetermined overhead rate x budgeted total manufacturing overhead.
• D)predetermined overhead rate x actual total manufacturing overhead.

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Definitions:

Units-of-Activity Method

A depreciation method that allocates costs based on the actual usage or output of the asset rather than time.

Depletion Cost

The allocation of the cost of natural resources, such as minerals or oil, over the period they are extracted and sold.

Units Extracted

The quantity of resources, such as minerals or oil, removed from the ground or source.

Units Sold

The total number of product units that have been sold during a specific period.