The standard cost of fixed overhead is calculated by:
A) standard fixed overhead allocation rate multiplied by standard quantity of direct labour per unit of output
B) standard fixed overhead allocation rate multiplied by standard quantity of allocation base per unit of input
C) standard fixed overhead allocation rate multiplied by standard quantity of allocation base per unit of output
D) total fixed overhead multiplied by standard quantity of allocation base per unit of output

Question

Quizplus · Accepted Answer

The standard cost of fixed overhead is calculated by multiplying the standard fixed overhead allocation rate by the standard quantity of the allocation base per unit of output. This method ensures that the fixed overhead costs are properly allocated to each unit of output based on the standard quantities expected to be used.

The Standard Cost of Fixed Overhead Is Calculated By