Assigning manufacturing overhead costs and other indirect costs is called

Question

Quizplus · Accepted Answer

Cost allocation is the process of assigning indirect costs such as manufacturing overhead to specific products or services. This process ensures that the indirect costs are included in the total cost of each product or service for accurate pricing and decision making.

Answer: D 
 Predetermined manufacturing overhead rate is calculated by dividing the estimated total manufacturing overhead costs for the period by the estimated total amount of the allocation base (such as direct labor hours or machine hours). This rate is then used to allocate manufacturing overhead costs to specific products or services based on their actual usage of the allocation base.

Assigning Manufacturing Overhead Costs and Other Indirect Costs Is Called