The Denominator in an Overhead Allocation Rate for Normal Costing

question 96

Multiple Choice

The denominator in an overhead allocation rate for normal costing is:

• A) Actual overhead costs
• B) Estimated activity level
• C) Estimated overhead costs
• D) Actual activity level

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Definitions:

Candy

Sweet confections made from sugar and other ingredients, popular as a treat or snack.

Pareto Optimal

A condition where no individual or preference criterion can be better off without making at least one individual or preference criterion worse off, representing an optimum allocation of resources.

Labor

The human effort, including physical and mental capabilities, used in the production of goods and services.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts and/or the physical factories, machinery, and equipment used to produce goods or services.