Which of the following statements regarding the manufacturing overhead budget is incorrect?
A) Both fixed and variable manufacturing overhead costs are budgeted.
B) The manufacturing overhead budget calculates the budgeted overhead costs for the year and also the predetermined overhead allocation rate for the year.
C) The cost accountant and the production manager work together to project variable and fixed manufacturing costs.
D) Depreciation on manufacturing equipment is not included because the production manager has no control over that cost allocation.

Question

Quizplus · Accepted Answer

This statement is incorrect because depreciation of manufacturing equipment is typically included in the manufacturing overhead budget as a fixed cost, even though the production manager may have no direct control over the allocation of this cost.

Which of the Following Statements Regarding the Manufacturing Overhead Budget