In a standard cost system overhead application is based on
A) Actual hours used for actual output
B) Standard hours allowed for actual output
C) Standard hours allowed for standard output
D) Actual hours used for standard output

Question

Quizplus · Accepted Answer

Standard overhead application in a standard cost system is based on the standard hours allowed for the actual output produced. This method facilitates variance analysis by comparing the standard cost to the actual cost incurred.

In a Standard Cost System Overhead Application Is Based on