When a company calculates its product unit cost using estimated costs, it is using which cost measurement method?
A) Standard costing
B) Actual costing
C) Full costing
D) Normal costing

Question

Quizplus · Accepted Answer

Standard costing uses estimated costs to calculate product unit cost. It is based on predetermined standards for direct materials, direct labor, and overhead costs. Actual costing uses actual costs incurred during production, full costing includes all costs (direct and indirect) associated with production, and normal costing is a hybrid of actual and budgeted costs.

When a Company Calculates Its Product Unit Cost Using Estimated