In a Standard Costing System, Overhead Is Applied to Inventory

question 12

Multiple Choice

In a standard costing system, overhead is applied to inventory using the

• A) flexible overhead rate.
• B) standard overhead rate.
• C) flexible variable rate.
• D) standard variable rate.

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Definitions:

Sales Price

The amount of money charged for a product or service, or the sum received upon the sale of a product or service.

Paid-In Capital

Funds received from investors in exchange for shares of the company's stock, representing equity financing as opposed to debt.

Excess

The amount by which something, such as inventory or revenue, exceeds what is normal, necessary, or specified, often indicating surplus or overproduction.

Cumulative Preferred Stock

Type of preferred stock where missed dividend payments accumulate and must be paid out before dividends can be distributed to common stockholders.