During 2013, the Kemp Construction Company Built 23 Custom Homes

question 28

Multiple Choice

During 2013, the Kemp Construction Company built 23 custom homes that ranged in size from 2,500 square feet to 8,000 square feet. One home was completed each month during January, February, and March. Three homes were completed during April and May. Two homes were completed during each of the months from June through December. Based upon this information, the most appropriate allocation base (i.e., cost driver) for the assignment of indirect overhead costs to each house would be the:

• A) Number of homes built during the month.
• B) Number of months in the year.
• C) Number of homes built during the year.
• D) Size of the home.

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Definitions:

Group Members

Individuals who form part of a team or group working towards a common goal.

Taking Minutes

The process of recording the main points and decisions of a meeting in a formal written format.

Objective Account

An objective account is a neutral description of events or facts without the influence of personal feelings or interpretations.

Formal

Following established conventions or rules, often characterized by a structured and official tone.