Which of the following statements regarding overhead allocation is true?
A) Actual job costs are almost always higher than estimated job costs
B) Actual job costs are almost always lower than estimated job costs
C) Actual job costs are almost always the same as estimated job costs
D) Actual job costs are almost always different from estimated job costs

Question

Quizplus · Accepted Answer

Actual job costs are almost always different from estimated job costs. Overhead allocation involves assigning indirect costs to specific jobs or products based on a predetermined rate or allocation method. The actual indirect costs incurred during production may differ from the estimated costs used in the allocation, resulting in variances between actual and allocated costs.

Which of the Following Statements Regarding Overhead Allocation Is True