In a Normal Costing System,how Is the Predetermined Overhead Rate

question 14

Multiple Choice

In a normal costing system,how is the predetermined overhead rate calculated?

• A)Divide actual manufacturing overhead by the normal (or estimated)activity level.
• B)Divide estimated manufacturing overhead by the actual activity level.
• C)Divide estimated manufacturing overhead by the normal (or estimated)activity level.
• D)Divide actual manufacturing overhead by the actual activity level.

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Definitions:

Insurance Expense

The cost incurred by a business or individual for purchasing insurance coverage, recognized as an expense in financial statements.

Trial Balance

A report listing all the balances in each general ledger account, ensuring debits equal credits for accuracy in accounting.

Account Balance

The amount of money present in a financial account, calculated as the total credits minus the total debits.

Posting Errors

Mistakes made during the process of transferring entries from the journal to the ledger in the accounting cycle.