The numerator of the fixed manufacturing cost rate is ___________?
Correct answer: B. budgeted fixed manufacturing cost
- A. variable manufacturing cost
- B. budgeted fixed manufacturing cost
- C. adjusted manufacturing cost
- D. unadjusted labor cost
Explanation
A fixed manufacturing cost rate is calculated as budgeted fixed manufacturing cost divided by the selected allocation base. Thus, the numerator is budgeted fixed manufacturing 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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