Question
Part 1: Which of the following is true about what the Internal Revenue Service requires for calculating indirect manufacturing costs per unit? A. requires the
Part 1:
Which of the following is true about what the Internal Revenue Service requires for calculating indirect manufacturing costs per unit?
A. requires the use of master-budget capacity utilization
B. requires the use of normal capacity utilization
C. a method of which fairly apportions indirect production costs among the various items produced
D. requires that theoretical capacity be used as a means of allocating indirect manufacturing costs
Part 2:
For financial reporting, SFAS 151 requires:
A. the allocation of fixed manufacturing overhead to production must be based on theoretical capacity of the facilities
B. the allocation of fixed manufacturing overhead to production must be based on practical capacity of the facilities
C. the allocation of fixed manufacturing overhead to production must be based on normal capacity of the facilities
D. the allocation of fixed manufacturing overhead to production must be based on the average of the capacity of the facilities over the three most recent period
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