The correct answer is: A. over allocated budget
Explanation:
The allocated amount of indirect cost is $2000, and the actual amount is $2200. This means that the budget was over allocated by $200.
A budget is a financial plan that outlines how a company expects to spend its money in the future. The budget is typically divided into categories, such as direct costs, indirect costs, and overhead. Direct costs are costs that can be directly attributed to a specific product or service, such as the cost of materials or labor. Indirect costs are costs that cannot be directly attributed to a specific product or service, such as the cost of rent or utilities. Overhead is a general term for indirect costs.
When a budget is over allocated, it means that the company has budgeted more money than it expects to spend. This can happen for a number of reasons, such as overestimating costs or underestimating revenue. When a budget is over allocated, the company may have to make cuts to its spending in order to stay within budget.
In this case, the company has allocated $2000 for indirect costs, but the actual amount of indirect costs is $2200. This means that the budget was over allocated by $200. The company may need to make cuts to its spending in order to stay within budget.
Here is a brief explanation of each option:
- A. over allocated budget – This is the correct answer. The budget was over allocated by $200.
- B. under allocated budget – This is not the correct answer. The budget was over allocated, not under allocated.
- C. under allocated indirect cost – This is not the correct answer. The indirect cost was actually $2200, which is more than the allocated amount of $2000.
- D. over allocated direct cost – This is not the correct answer. The direct cost was not mentioned in the question.