Question

LO 6.2Overhead costs are assigned to each product based on ________.

the proportion of that product’s use of the cost driver
a predetermined overhead rate for a single cost driver
price of the product
machine hours per product

Answer 1

Answer: The correct answer is "the proportion of that product use of the cost driver".

Explanation: Overhead costs are assigned to each product based on the proportion of that product use of the cost driver.

Because if general expenses are applied by using a predetermined rate based on an activity, these costs may not be allocated in the correct way.