After All Manufacturing Overhead Costs Have Been Assigned to the Production

question 65

Multiple Choice

After all manufacturing overhead costs have been assigned to the production departments, the step to assign all manufacturing overhead costs accumulated in a production department to the jobs that the department has worked on is called:

• A) support department cost allocation.
• B) cost distribution.
• C) overhead application.
• D) cost apportionment.

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Definitions:

Labor Efficiency Variance

The variance between the real hours spent working and the anticipated standard hours, times the standard rate of labor.

Actual Direct Labor Rate

The actual amount paid per hour to workers who are directly involved in the production of goods or services.

Labor Rate Variance

The difference between the actual cost of direct labor and the standard cost, indicating how well the company is managing its labor costs.

Direct Labor Standards

The expected amount of time and wage rate for workers to complete a unit of production.