Indicate Whether Each of the Following Statements Is True or False

question 63

Short Answer

Indicate whether each of the following statements is true or false.
1.A predetermined overhead rate should not be used to allocate overhead costs when volume varies during the year.
2. A predetermined overhead rate is calculated using estimated cost and volume data.
3. A predetermined overhead rate is calculated by dividing costs by volume, using a measure of volume such as direct labor hours or direct materials cost.
4. A company may need to allocate overhead costs to products to make pricing decisions for the products.
5. Accounting reports at the end of the fiscal year are based on estimated costs rather than actual costs.

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Definitions:

Dimensions

Refers to measurements or aspects of objects, spaces, or abstract concepts, often expressed in terms of length, width, height, depth, or scope.

Discrepancy

A lack of compatibility or uniformity that leads to a difference between things that should be the same, often leading to conflict or confusion.

Avoid

To keep oneself from doing something, or to prevent a particular outcome from happening.

Transaction

An instance of buying or selling something; a business deal or action.