COST ACCOUNTING
MANUFACTURING OVERHEAD
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It makes it possible to estimate the total job costs sooner
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Actual overhead for the period is not known until the end of the period or the following period
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Seasonal factors and fluctuation in business cycles is another reason
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It results in a higher chance of profit
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Detailed explanation-1: -Solution(By Examveda Team) Legal cost on debt realization is not a selling overhead.
Detailed explanation-2: -Manufacturing overhead does not include any of the selling or administrative functions of a business. Thus, the costs of such items as corporate salaries, audit and legal fees, and bad debts are not included in manufacturing overhead.
Detailed explanation-3: -Overhead costs are those that are not directly related to the production of goods or services, but are necessary for the operation of a business. Examples of overhead costs include rent, utilities, insurance, legal fees, office supplies, advertising, payroll, and accounting fees.
Detailed explanation-4: -Calculating overhead costs is not just important for budgeting but also determining how much the business should charge for a service or product to make a profit.