If the employees of division A work for 8000 hours for $90 per hour, then the rate must be paid in division B in accordance of single rate method will be ___________?
Correct answer: A. $90 per hour
- A. $90 per hour
- B. less than $90 per hour
- C. greater than $90 per hour
- D. none of aboveCompare Credit Cards
Explanation
Under the single-rate method, both fixed and variable support costs are combined into one rate, so Division B is charged the same $90 per hour rate. A different rate would apply under a dual-rate method.
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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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