When Developing an Estimated Overhead Allocation Rate Which of the Following

question 41

Multiple Choice

When developing an estimated overhead allocation rate which of the following could be used for the numerator?

• A) actual annual overhead cost
• B) estimated annual overhead cost
• C) estimated direct labour hours
• D) estimated annual revenue

---

Definitions:

Detailed Cost Estimates

Detailed cost estimates refer to the comprehensive evaluation of all anticipated costs involved in completing a project, task, or product development.

Actual Cost

The true, total expense incurred for a project, activity, or item.

Earned Value

A project management technique for measuring project performance and progress in an objective manner.

Actual Cost

The final, real amount spent on completing a specific task, project, or acquisition, as opposed to estimated or budgeted costs.