Which costing system does not include over- or underapplied overhead?
A) Actual costing system
B) Normal costing system
C) Process costing system
D) Activity-based costing system

Question

Quizplus · Accepted Answer

The actual costing system uses actual costs incurred for direct materials, direct labor, and manufacturing overhead, therefore there is no over- or underapplied overhead. The other costing systems may use predetermined overhead rates or estimate indirect costs, which may result in over- or underapplied overhead.

Which Costing System Does Not Include Over- or Underapplied Overhead