One Reason Indirect Costs May Be Overapplied Is Because ________

question 33

Multiple Choice

One reason indirect costs may be overapplied is because ________.

• A) the actual allocation base quantity exceeds the budgeted quantity
• B) budgeted indirect costs exceed actual indirect costs
• C) requisitioned direct materials exceed budgeted material costs
• D) Both A and B are correct.

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Definitions:

Creditor

An individual or institution to whom money is owed.

Technical Default

A failure to meet some specific terms of a loan agreement, lease, or another contract, other than the failure to make payments as and when they fall due.

Interest Payments

Payments made by a borrower to a lender, consisting of the cost of borrowing money over a period of time.

Principal Payments

Payments made towards the original amount borrowed in a loan, excluding interest payments, thereby reducing the outstanding principal balance.