Which of the Following Statements Best Compares Modular Bills and Phantom

question 18

Multiple Choice

Which of the following statements best compares modular bills and phantom bills?

• A) Both pertain to assemblies that are not inventoried.
• B) There is no difference between the two.
• C) Both pertain to assemblies that are inventoried.
• D) Modular bills are used for assemblies that are not inventoried, unlike phantom bills.
• E) Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

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Definitions:

Machine-Hours

A measure of the amount of time machines are running in the production process, used to allocate manufacturing overhead costs.

Predetermined Overhead Rate

The rate used to allocate manufacturing overhead to individual units of production, based on estimated costs and activity levels.

Machine-Hours

A measure used in accounting to allocate manufacturing overhead costs to products based on the number of hours machines are used in the production process.

Markup

The amount added to the cost price of goods to cover overhead and profit, determining the selling price.