The total indirect cost in the pool by an actual quantity of cost allocation base, is used to calculate ____________?
Correct answer: A. actual manufacturing overhead rate
- A. actual manufacturing overhead rate
- B. manufacturing overhead costs
- C. overhead rate
- D. direct rate
Explanation
Dividing the indirect cost pool by the actual quantity of the allocation base gives the actual manufacturing overhead rate. A direct rate applies to direct costs, not pooled indirect costs.
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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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