Asked by Danielle Efrat on Jul 22, 2024
Verified
When standard costs are used, factory overhead is assigned to products with a predetermined standard overhead rate.
Standard Overhead Rate
A predetermined rate applied to estimate the cost of a product’s indirect expenses such as manufacturing or production overheads.
- Acquire knowledge on the aim and mechanism of standard cost utilization in budget formulation and discrepancy evaluation.
Verified Answer
LE
Lynette EngelbretsonJul 28, 2024
Final Answer :
True
Explanation :
When standard costs are used, factory overhead is assigned to products with a predetermined standard overhead rate, which is calculated based on estimated overhead costs and expected production levels. This allows for more accurate costing of products and helps in decision-making regarding pricing and production planning.
Learning Objectives
- Acquire knowledge on the aim and mechanism of standard cost utilization in budget formulation and discrepancy evaluation.
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