Gregory Enterprises Has Identified Three Cost Pools to Allocate Overhead

question 31

Multiple Choice

Gregory Enterprises has identified three cost pools to allocate overhead costs.The following estimates are provided for the coming year:

The accounting records show the Mossman Job consumed the following resources:

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

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

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Definitions:

Team Development

The process of improving collective performance through goal clarification, building trust, and enhancing communication and collaborative skills among members.

Cohesion

The degree to which members of a group or team are united in pursuing common goals and how well they work together.

Team Building

Activities or exercises designed to improve interpersonal relations and group dynamics, enhancing the performance and efficiency of a team.

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To increase the speed or rate of something, often referring to the process of speeding up a task or activity.