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) normal costing system.
C) standard costing system.
D) activity-based costing system.

Question

Quizplus · Accepted Answer

A normal costing system uses actual costs for direct materials and labor and predetermined overhead rates to apply overhead. Standard costing systems use predetermined amounts for materials, labor, and overhead. Activity-based costing systems focus on activities rather than departments when assigning costs. Actual costing systems use actual costs for all three cost categories.

A Costing System That Uses Actual Costs for Direct Materials