The costing and allocating situation, in which the indirect cost allocated amount is less than actually incurred amount is known as ___________?
Correct answer: C. under allocated indirect cost
- A. over allocated budget
- B. under allocated budget
- C. under allocated indirect cost
- D. over allocated direct costCompare Credit Cards
Explanation
When allocated indirect cost is less than the actual indirect cost incurred, the difference is underallocated indirect cost. Overallocation occurs when the amount allocated exceeds actual cost.
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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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