When normal costing is used, actual overhead costs are
A)recorded in the work-in-process account.
B)recorded in the overhead control account.
C)recorded in the finished goods account.
D)not recorded.

Question

Quizplus · Accepted Answer

Actual overhead costs are recorded in the overhead control account when normal costing is used. This is because normal costing uses predetermined overhead rates based on estimated overhead costs, so actual costs are recorded separately in the overhead control account to evaluate and adjust the predetermined rates if necessary. The work-in-process and finished goods accounts only include actual direct materials and direct labor costs, not overhead.

When Normal Costing Is Used, Actual Overhead Costs Are