Answer the Following Questions Using the Information Below

question 69

Multiple Choice

Answer the following questions using the information below:
Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
The accounting records show the Mossman Job consumed the following resources:

-Which method of allocation probably best estimates actual overhead costs used? Why?

• A)Single direct labor-hours cost driver because it is best to allocate total costs uniformly to individual jobs.
• B)Single direct labor-hours cost driver because it is easiest to analyze and interpret.
• C)Three activity-cost drivers because they best reflect the relative consumption of resources.
• D)Three activity-cost drivers because product costs can be significantly cross-subsidized.

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Definitions:

State And Federal Taxes

Taxes imposed by state and federal governments on individuals and businesses for various types of income, sales, property, and other activities.

Interest Income

The income earned by an individual or entity from the investment in interest-bearing financial assets like savings accounts, bonds, or loans.

Cost Of Inflation Reduction

refers to the expenses associated with implementing policies and measures to lower inflation within an economy.

Unemployment

The condition of being out of work and actively seeking employment but unable to find a job.