Vidyalelo
Commerce · Q677

Costing

Graduate and Post Graduate · Commerce · question 677

Q677

If an allocated indirect cost is 1500 and actual incurred indirect cost is 1200, then this is classified as

A.
applied indirect cost
B.
applied direct cost
C.
incurred indirect cost
D.
over allocated indirect cost
Answer

Answer: Option D

Solution

Answer: Option D
Solution:
If an allocated indirect cost is 1200, then this is classified as over allocated indirect cost because the allocated amount is less than actual amount.