In the standard costing, the standard quantity allocation is multiplied to standard overhead rates for allocating __________?
Correct answer: C. overhead costs
- A. flexible costs
- B. variable costs
- C. overhead costs
- D. fixed costs
Explanation
Standard costing allocates overhead by applying the standard overhead rate to the standard quantity or activity level allowed for actual output. Thus, the calculation is used for overhead costs, not merely one subclass such as fixed or variable costs.
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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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