Which of the Following Is Not a Step in Allocating

question 97

Multiple Choice

Which of the following is not a step in allocating indirect costs to cost objects?

• A) Multiply the allocation rate by the weight of the cost driver.
• B) Trace direct costs to individual cost pools.
• C) Compute an allocation rate by dividing the total cost to be allocated by the total cost driver volume.
• D) All of these answers are steps in allocating indirect costs.

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Definitions:

Manufacturing Overhead

Indirect costs related to manufacturing that cannot be directly traced to specific products, such as factory rent, utilities, and equipment maintenance.

Overtime

Additional time worked beyond the standard working hours, usually compensated at a higher rate than regular hours.

Cost of Goods Manufactured

The total production cost of goods that were completed during a specific accounting period, including materials, labor, and overhead.

Job Cost Sheet

A record that tracks the costs associated with a specific job, including materials, labor, and overhead.