The standard cost method uses budgeted cost driver use to determine the overhead allocation rate.

Name: The standard cost method uses budgeted cost driver use to determine the overhead allocation rate.
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Question

Quizplus · Accepted Answer

The standard cost method uses budgeted cost driver use (such as machine hours, labor hours, or units produced) to determine the overhead allocation rate. This allows for the allocation of overhead based on expected usage, rather than actual usage, which can help with planning and decision-making.

The Standard Cost Method Uses Budgeted Cost Driver Use to Determine