When using a normal costing system, manufacturing overhead is allocated using the ________ manufacturing overhead rate and the ________ quantity of the allocation base.
A) budgeted; actual
B) budgeted; budgeted
C) actual; budgeted
D) actual; actual

Question

Quizplus · Accepted Answer

In a normal costing system, manufacturing overhead is allocated using the budgeted (or predetermined) overhead rate based on budgeted costs and the actual quantity of the allocation base used during the period. This approach helps in assigning overhead costs more consistently throughout the year.

When Using a Normal Costing System, Manufacturing Overhead Is Allocated