A costing system that uses actual costs for direct materials and labor and predetermined overhead rates to apply overhead is called a(n)
A)actual costing system.
B)standard costing system.
C)normal costing system.
D)activity-based costing system.

Question

Quizplus · Accepted Answer

A normal costing system uses actual costs for direct materials and labor but applies overhead using predetermined rates, making it a hybrid of actual and standard costing systems. Activity-based costing is a more complex costing system that assigns overhead costs based on the actual activities that drive those costs.

A Costing System That Uses Actual Costs for Direct Materials