Which of the following statements is/are correct concerning the application of overhead in a standard costing system driven by process hours?
A) A predetermined overhead rate is allowed only for fixed overhead.
B) Overhead application is based on standard process hours allowed.
C) Overhead application is based on actual process hours incurred.
D) Only prime costs are considered to be product costs in a standard costing system.
E) Only variable overhead costs are applied to production.

Question

Quizplus · Accepted Answer

Overhead application in a standard costing system is based on the standard process hours allowed for the actual output produced. This method helps in planning, controlling, and analyzing overhead costs by comparing them with the standard or expected costs.

Which of the Following Statements Is/are Correct Concerning the Application