Question

The budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount

for fixed overhead costs.

for variable overhead costs.

for both variable and fixed overhead costs.

only when standard hours allowed are less than normal capacity.

Answer 1

Answer : Option - B, for variable overhead costs

Explanation : Variable overhead is the cost of operating a business, which fluctuates with manufacturing activity. As production output increases or decreases, variable overhead moves in tandem.

Variable overhead per unit is same for standard units actual units. It only increase or decrease due to change in number of outputs. So, budgeted overhead costs for standard hours allowed and the overhead costs applied to the product are the same amount.