Indicate whether each of the following statements is true or false.A predetermined overhead rate should not be used to allocate overhead costs when volume varies during the year._____A predetermined overhead rate is calculated using estimated cost and volume data._____A predetermined overhead rate is calculated by dividing costs by volume, using a measure of volume such as direct labor hours or direct materials cost._____A company may need to allocate overhead costs to products to make pricing decisions for the products._____Accounting reports at the end of the fiscal year are based on estimated costs rather than actual costs._____
What will be an ideal response?
| A predetermined overhead rate should not be used to allocate overhead costs when volume varies during the year. | False |
| A predetermined overhead rate is calculated using estimated cost and volume data. | True |
| A predetermined overhead rate is calculated by dividing costs by volume, using a measure of volume such as direct labor hours or direct materials cost. | True |
| A company may need to allocate overhead costs to products to make pricing decisions for the products. | True |
| Accounting reports at the end of the fiscal year are based on estimated costs rather than actual costs. | False |
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