The third step in developing operating budget is to __________?
Correct answer: C. identify variable overhead cost
- A. choose the budgeting period
- B. select allocation bases
- C. identify variable overhead cost
- D. compute the per unit rate
Explanation
After choosing the budgeting period and allocation base, the next step is to identify the variable overhead costs. The variable costs are needed before calculating a per-unit or activity-based rate.
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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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