In manufacturing settings, the budgeted fixed overhead rate is classified as ___________?
Correct answer: B. production denominator level
- A. production numerator level
- B. production denominator level
- C. production cost level
- D. production fixed levelFinance
Explanation
A fixed overhead rate is calculated using a budgeted denominator level of production, such as expected machine hours or units. The denominator represents the planned production capacity used to spread fixed overhead.
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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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