The budgeted total cost in indirect cost pool, is divided by budgeted total quantity of the cost allocation base, is calculated by _________?
Correct answer: B. budgeted indirect cost rate
- A. budgeted direct cost rate
- B. budgeted indirect cost rate
- C. expected indirect cost rate
- D. direct budget percentage
Explanation
An indirect cost rate is calculated by dividing the budgeted indirect cost pool by the budgeted quantity of its allocation base. This rate is then used to assign indirect costs to cost objects.
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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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