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Q1 What is allocation or absorption?
The margin allocated to each product
The allocation of direct costs over units produced
The spread of overhead costs over all units produced to track the resources being consumed
Q2. The predetermined manufacturing overhead rate or POR is calculated by?
Activity driver divided by the estimated overhead budget
Direct labor costs divided by the estimated overhead budget
Estimated overhead budget divided by the estimated amount of activity

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  • 1. Q1 What is allocation or absorption? The margin allocated to each product The allocation of direct costs over units produced The spread of overhead costs over all units produced to track the resources being consumed Q2. The predetermined manufacturing overhead rate or POR is calculated by? Activity driver divided by the estimated overhead budget Direct labor costs divided by the estimated overhead budget Estimated overhead budget divided by the estimated amount of activity