A Predetermined Overhead Application Rate

question 7

Multiple Choice

A predetermined overhead application rate:

• A)Expresses an expected relationship between overhead costs and an activity base.
• B)Can be determined by dividing budgeted direct labor cost by the budgeted factory overhead costs.
• C)Is computed at the end of the period once actual overhead costs are known.
• D)Applies the same amount of overhead to each product or service.

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Definitions:

Nonbreaching Party

An entity or individual in a contract who has not violated any terms of the agreement.

Satisfaction

The fulfillment or discharge of an obligation such as paying off a debt, completing a contractual duty, or resolving a legal claim.

Subjective Standard

A standard for decision-making that is based on personal feelings, tastes, or opinions, varying from person to person.

Objective Standard

A legal benchmark that uses a reasonable person's perspective to evaluate an individual's actions or decisions in a given situation.