Which of the following would an auditor most likely question included in calculation of the overhead rate for a company that manufactures a product?
A)Factory supervisor salary.
B)Indirect materials.
C)Machine hours.
D)Selling expense.

Question

Quizplus · Accepted Answer

Selling expenses are not included in the calculation of the overhead rate for manufacturing a product. Overhead rates typically include costs directly related to the production process, such as factory supervisor salaries, indirect materials, and machine hours. Selling expenses are considered period costs, not product costs, and are not allocated to manufactured products.

Which of the Following Would an Auditor Most Likely Question