CameraIcon

SearchIcon

MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Preparation of Statement of Profit and Loss

When is used ...

Question

When _________ is used on the basis of budgeted overheads and the rate is applied to the actual base, the actual overhead expenses may be different from the charged overheads.

A

A predetermined rate

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

B

Actual rate method of absorption

No worries! We‘ve got your back. Try BYJU‘S free classes today!

C

Both A and B

No worries! We‘ve got your back. Try BYJU‘S free classes today!

D

None of the above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C A predetermined rate
A predetermined rate of overhead is calculated by dividing the estimated overhead cost by the estimated number of hours. It refers to the estimation hence actual overheads may be different from the charged overheads.

Suggest Corrections

thumbs-up

0

Similar questions

Q. When factory overhead is applied to production, based on actual inputs multiplied by a predetermined application rate, the process is known as ____________.

Q. Which standard cost variance represents the difference between actual factory overhead incurred and budgeted factory overhead based on actual direct labour hours worked?

Q. If a company uses a predetermined rate for absorbing factory overhead, the volume variance is the _______________________.

Q. Suresh Ltd. budgeted overhead at Rs. 2,55,000 for the period for Department A, based on a budgeted volume of 1,00,000 direct labour hours. At the end of the period, the Factory Overhead Control Account for Department A had a balance of Re. 2,70,000; actual direct labor hours were 1,05,000. What was the over- or underapplied overhead for the period?

Q. Absorption of production overhead costs on a marginal cost basis is unacceptable:

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Statement of Profit and Loss

ACCOUNTANCY

Watch in App

explore_more_icon

Explore more

Preparation of Statement of Profit and Loss

Standard XII Accountancy

Join BYJU'S Learning Program

CrossIcon