Which of the following statements describes a characteristic...

Which of the following statements describes a characteristic of overhead costs? a. Overhead costs are distorted due to uneven production from period to period. b. Overhead costs have a direct relationship with units produced, like direct materials. c. High production in a month leads to high unit overhead costs. d. All of these choices are correct. e. None of these choices are correct.

Transcript

00:01 Hello students, here is a question which of the following statement describes a characteristics of overhead cost.

00:05 So, we have five options given in the question.

00:09 So, the option a is overhead cost are desorted due to overhead cost or desorted due to uneven production from period to period.

00:32 So, this is our first option and the second option is overhead cost are overhead cost have direct relationship with direct relationship with units produced units produced like direct materials and option c is high production in high production in a month leads to high unit overhead high unit overhead cost and option d is all of these choices all of these choices are correct choices are correct and option a is none of these choices are correct choices are correct.

01:51 Let us discuss the answer overhead cost are desorted due to uneven production from period to period.

01:59 This statement is not necessarily true while it is possible of overhead cost are desorted due to uneven production.

02:07 It is not the characteristics that applies all overhead cost.

02:13 So, when it comes to option b overhead cost have direct relationship with units produced like direct material.

02:19 This statement is not true while some overhead cost may have direct relationship with unit produced such as direct labor cost not all overhead cost are directly tied to production volume and when it comes to option c high production in a month leads to a high overhead cost.

02:38 This statement is not necessarily true while it is not possible for higher production leads to higher overhead cost...

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