The cost allocation base used by an operating manager is classified as ____________?
Correct answer: A. machine hours
- A. machine hours
- B. flexible hours
- C. variable hours
- D. fixed hours
Explanation
Machine hours are a common cost-allocation base when machine use drives overhead consumption. Flexible, variable and fixed hours are not standard classifications of an allocation base.
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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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