Answered

Discover the answers to your questions at Westonci.ca, where experts share their knowledge and insights with you. Our platform provides a seamless experience for finding reliable answers from a knowledgeable network of professionals. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

A company has 5 production cost centers. Manufacturing overhead is assigned to work-in-process inventory by the use of overhead cost rates. Which of the following best describes how the overhead cost rates should be calculated?
Select one:
a. Number of units produced divided by the total cost center overhead
b. Number of units produced multiplied by the unit overhead cost
c. Total indirect costs for the business divided by the total number of units produced
d. Overhead costs for each cost center divided by activity levels of the relevant cost center

Sagot :

Answer: D. Overhead costs for each cost center divided by activity levels of the relevant cost center

Explanation:

The overhead rate refers to the amount

that a business spends on manufacturing a product or the provision of services to its customers.

The overhead cost rates will be calculated as the overhead costs for each cost center divided by the activity levels of relevant cost center.

Therefore, the correct option is D.

Visit us again for up-to-date and reliable answers. We're always ready to assist you with your informational needs. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.