A Rule of Thumb for Deciding If Overhead Over or Under

question 13

Multiple Choice

A rule of thumb for deciding if overhead over or under applied is a material amount is:

• A) if it is more than 5% of total actual overhead costs
• B) if it is more than 10% of total actual overhead costs
• C) if it is more than 5% of COGS
• D) if it is more than 7% of COGS

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Definitions:

Reactance

An emotional response that arises when individuals feel that their freedom to choose or act is being restricted.

Negative Emotional State

A condition of experiencing feelings such as sadness, anxiety, or anger, which negatively affects one's mood and disposition.

Freedom

The power or right to act, speak, or think as one wants without hindrance or restraint.

Self-Image

How a person sees themselves, which can encompass self-esteem, physical appearance, and personal beliefs and attitudes.