Blue Bull Inc

question 55

Multiple Choice

Blue Bull Inc.uses direct labor hours to allocate variable and fixed overhead costs.Under which of the following circumstances would the base used to calculate the variable overhead rate be the same as that used for the fixed overhead rate?

• A)When actual labor hours are the same as budgeted labor hours
• B)When standard indirect labor hours agree with standard direct labor hours
• C)In all circumstances the base used for each calculation is the same
• D)When the number of labor hours expected to be incurred for the period is the same as normal capacity direct labor hours

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Definitions:

Net Method

An accounting system that records transactions with their net effect, considering any discounts or allowances for prompt payment.

Loan Liability

A financial obligation representing borrowed funds that the borrower is legally required to repay to the creditor, typically with interest.

Foreign Exchange Rate

The rate at which one currency can be exchanged for another, often used in international trade and investment.

Interest

The charge for borrowing money, calculated as a percentage of the amount borrowed.