Vidyalelo
Commerce · Q656

Costing

Graduate and Post Graduate · Commerce · question 656

Q656

In a normal accounting period, an allocated amount of indirect cost is 700 and an actual amount is 800, then this can be classified as

A.
under allocated indirect cost
Answer
B.
over allocated direct cost
C.
over allocated budget
D.
under allocated budget

Answer: Option A

Solution

Answer: Option A
Solution:
In a normal accounting period, an allocated amount of indirect cost is 800, then this can be classified as under allocated indirect cost because the allocated amount is less than actual amount.