Which Method of Allocation Probably Best Estimates Actual Overhead Costs

question 160

Multiple Choice

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

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

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Definitions:

Birth Weight

The weight of a baby at the time of its birth, an important indicator of newborn health and developmental status.

Babinski Reflex

Fanning the toes when the soles of the feet are stroked.

Extended Early Contact

Sustained interaction between a newborn and caregiver soon after birth, aimed at promoting bonding and attachment.

Preterm Babies

Infants born before completing the usual 37 to 42 weeks of gestation, often requiring specialized care due to underdeveloped organs.