Applied overhead consists of which of the following?
d. actual activity times predetermined overhead rate
If the level of activity increases,a. actual activity times actual overhead rateb. estimated activity
times actual overhead ratec. estimated activity times predetermined overhead rate
d. actual activity times predetermined overhead rate
If the level of activity increases,a. variable cost per unit and total fixed costs increase.b. fixed
cost per unit and total variable cost increase.c. total cost will increase and fixed cost per unit will
decrease.d. variable cost per unit and total cost increase.
Solution
a. In overhead application , a predetermined Overhead rate is calculated and the actual activity is
multiplied by the predetrmined overhead rate to get the applied Overhead.
So option d is correct.
b.
If the activity level increases, the variable cost/unit remain same but total Variable cost increases.
The Total Fixed cost remain the same but the per unit Fixed cost reduces. So, when Activity
level increases, the Total cost increases and Fixed cost per unit decreases. Therefore option c. is
correct..
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Applied overhead consists of which of the followingd. actual acti.pdf
1. Applied overhead consists of which of the following?
d. actual activity times predetermined overhead rate
If the level of activity increases,a. actual activity times actual overhead rateb. estimated activity
times actual overhead ratec. estimated activity times predetermined overhead rate
d. actual activity times predetermined overhead rate
If the level of activity increases,a. variable cost per unit and total fixed costs increase.b. fixed
cost per unit and total variable cost increase.c. total cost will increase and fixed cost per unit will
decrease.d. variable cost per unit and total cost increase.
Solution
a. In overhead application , a predetermined Overhead rate is calculated and the actual activity is
multiplied by the predetrmined overhead rate to get the applied Overhead.
So option d is correct.
b.
If the activity level increases, the variable cost/unit remain same but total Variable cost increases.
The Total Fixed cost remain the same but the per unit Fixed cost reduces. So, when Activity
level increases, the Total cost increases and Fixed cost per unit decreases. Therefore option c. is
correct.
