The Cost-Allocation Base Used for the Fixed Overhead Rate Should

question 150

Multiple Choice

The cost-allocation base used for the fixed overhead rate should be ________.

• A) underestimated due to the conservatism principle
• B) overestimated due to the conservatism principle
• C) the most plausible and reliable measure available of the cause and effect relationship between overhead costs and production volume
• D) the most plausible and reliable measure available of the relationship between overhead costs and sales