Which of the Following Is an Example of a Discretionary

question 172

Multiple Choice

Which of the following is an example of a discretionary fixed expense?

• A)contract workers
• B)property taxes on a factory building
• C)depreciation on a factory building
• D)insurance on a building

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Definitions:

Underapplied Overhead

A scenario where the estimated costs for manufacturing overhead are lower than the overhead costs that were actually encountered.

Predetermined Overhead Rate

An estimated charge per labor hour or machine hour used to allocate overhead costs to products or services.

Direct Labor Cost

The total expense incurred by a company for the wages of workers who are directly involved in the manufacturing or production process.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders, based on a certain activity base.