Normal costing overhead rates are developed at the beginning of each period based on the
A) Actual overhead costs of the previous period
B) Actual activity level of the previous period
C) Direct labor hours at maximum capacity
D) Expected activity level of the coming period

Question

Quizplus · Accepted Answer

Normal costing uses expected activity levels and budgeted overhead costs to determine overhead rates for the coming period.

Normal Costing Overhead Rates Are Developed at the Beginning of Each