The amount of cash paid out for overhead each period does not equal the total overhead costs incurred during the period because:
A)overhead expenses rarely require cash payments.
B)overhead expenses only require cash payments for factory rent.
C)overhead expenses only require cash payments for indirect materials.
D)depreciation expense does not require a cash payment.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense meaning that it does not require a cash payment. Therefore, the amount of cash paid out for overhead each period will be less than the total overhead costs incurred during the period.

The Amount of Cash Paid Out for Overhead Each Period