During a typical accounting cycle, if the assigned indirect cost is $2000 but the actual cost incurred is $2200, how is this situation classified?

Job Costing MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

PPSCFPSCNTSPakistan govt jobs
Subject
Job Costingaccounting-mcqs › cost-accounting-mcqs › job-costing
Published
10 May 2023
Last updated
28 May 2026

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Explanation

When the allocated indirect cost ($2000) is less than the actual indirect cost ($2200), it results in an over allocated budget. This means the budgeted amount was insufficient to cover the actual expenses.

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