The following statement about overhead absorption rates (OARs) is true. The OAR will: O a change continuously to reflect changes in output and costs. Ob only be calculated when all actual costs are known, Oc normally be based on estimates of what costs are expected to be. Od not change from one year to the next, once it is set.
The following statement about overhead absorption rates (OARs) is true. The OAR will: O a change continuously to reflect changes in output and costs. Ob only be calculated when all actual costs are known, Oc normally be based on estimates of what costs are expected to be. Od not change from one year to the next, once it is set.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please explain why the option is correct and why the other options are incorrect
Transcribed Image Text:The following statement about overhead absorption rates (OARs) is true. The OAR will:
O a change continuously to reflect changes in output and costs.
Ob only be calculated when all actual costs are known,
Oc
Od
normally be based on estimates of what costs are expected to be.
not change from one year to the next, once it is set.
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