When the predetermined overhead rate is based on the level of activity at capacity, an item called the Cost of Unused Capacity might appear to be treated as a period expense on income statements prepared for internal management use." Please explain the statement (True/False) thoroughly with examples. What does "Cost of Unused Capacity" mean?

Q: The definition of the cost is the collection of cost data in some organized way by means of an…

A: Cost is amount of cost incurred

Q: There must be a correlation between the activity and changes in the amount of overhead.   True /…

A: Correlation:-It refers to the statistical relationship between two variables or activities.…

Q: Which of the following does NOT form a part of Total cost? A. Production overheads B. Factory…

A: Total cost involves all the cost incurred in order to reach a particular level of output.

Q: Indirect costs are known as: (a)  Avoidable costs (b)  Overheads (c)  Incremental costs (d)…

A: 1) Indirect costs means costs which are not directly related to cost of production. Indirect costs…

Q: Describe cost depletion and percentage depletion. Whyis the percentage depletion method permitted?

A: Depletion: Depletion is defined as the reduction in the value of natural resources due to its…

Q: ) what is the under-or-over allocated indirect production (overhead) costs? Discuss methods of…

A: Overhead means the all indirect expenses which were incurred in the manufacturing the product or…

Q: true of false: A collection of costs to be assigned is called a cost pool.

A: Activity based Costing system is a method which is used to calculate total amount of Cost by…

Q: Which of statements about the contribution income statement is correct? Group of answer choices

A: A contribution income statement is defined as the statement in which all the variable costs and all…

Q: 1.An activity that has a direct cause-effect relationship with the resources consumed is a(n) Group…

A: In activity based costing the cost are apportioned based on the respective cost drivers

Q: Both the equivalent units schedules and the physical flow are prerequisites to calculating the…

A: The question is related to Process Costing. There are two methods of equivalent units  1. FIFO  2.…

Q: The term "relevant range" means the range over which: a particular cost formula is valid. production…

A: Lets understand the basics.Cost accounting is that branch of accounting in which all costs incurred…

Q: In cost accounting, relevant range refers to the range over which a. cost relationships are valid b.…

A: Cost accounting refers to managerial accounting that is related to capturing the total cost of…

Q: Indirect costs in the construction business are also calle a. Total money earned b. Gross profit c.…

A: Indirect Cost -Any expense incurred by the company that cannot be directly attributed to a specific…