Manufacturing overhead costs are applied to each job
A)only if the cost can be directly traced to the job.
B)when the indirect cost is incurred.
C)by using a predetermined overhead rate.
D)at the end of the year when exact cost figures are known.

Question

Quizplus · Accepted Answer

Manufacturing overhead costs cannot always be directly traced to specific jobs, so a predetermined overhead rate is used to apply indirect costs to each job based on a measure of activity such as direct labor hours, machine hours, or material costs. This allows for more accurate costing and pricing of products.

Manufacturing Overhead Costs Are Applied to Each Job