In a normal costing system actual overhead costs are allocated to jobs.

Question

Quizplus · Accepted Answer

In a normal costing system, overhead costs are allocated to jobs based on predetermined overhead rates that are calculated using estimated overhead costs and activity levels rather than actual overhead costs. Actual overhead costs are recorded separately and compared to the estimated overhead costs to calculate over- or underallocated overhead at the end of the period.

In a Normal Costing System Actual Overhead Costs Are Allocated