Which of the Following Describes the Allocation Base for Allocating

question 186

Multiple Choice

Which of the following describes the allocation base for allocating manufacturing overhead costs?

• A) the primary cost driver of indirect manufacturing costs
• B) the estimated base amount of manufacturing overhead costs in a year
• C) the percentage used to allocate direct labor to Work-in-Process Inventory
• D) the main element that causes direct costs

---

Definitions:

Net 45

A payment term indicating that the full payment is due 45 days after the invoice date.

Order Costs

Expenses related to placing an order for goods or services, including production or acquisition and delivery costs.

Carrying Cost

Expenses associated with holding inventory, including storage, handling, insurance, and opportunity costs.

Annual Demand

The total quantity of a product or service that consumers are willing and able to purchase in a given year.