Determining the standard fixed factory overhead cost applied to production for a period involves all the following essential elements except:
A) The actual amount of fixed overhead cost incurred during the period.
B) A cost driver (or drivers) for applying the fixed overhead.
C) The standard fixed overhead application rate.
D) An assumed output level, as reflected by the quantity of the cost driver for applying the fixed overhead (i.e., the denominator activity level for the period).
E) The total budgeted fixed overhead cost for the period.

Question

Quizplus · Accepted Answer

The actual amount of fixed overhead cost incurred during the period is not used to determine the standard fixed factory overhead cost applied to production; instead, the standard cost is based on budgeted or standard amounts, not actual costs incurred.

Determining the Standard Fixed Factory Overhead Cost Applied to Production