If the budgeted indirect cost is $225 and the budgeted cost allocation base is $750 per hour, then the annual indirect cost (budgeted) would be __________?
Correct answer: A. $168,750
- A. $168,750
- B. $148,570
- C. $186,750
- D. $125,680
Explanation
Budgeted annual indirect cost equals the rate per hour multiplied by budgeted hours: $225 × 750 = $168,750. Therefore, option a matches the cost-pool calculation.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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