In terms of allocating fixed overhead cost to products,generally accepted accounting principles:
A)Require that such allocations be based on normal capacity.
B)Allow for the use of either practical capacity or theoretical capacity.
C)Don't apply since the resulting data are used only internally (for control purposes).
D)Specify only that such costs be "reasonably allocated" to outputs.

Question

Quizplus · Accepted Answer

Generally accepted accounting principles (GAAP) require that fixed overhead costs be allocated based on normal capacity, which is the expected level of production under normal circumstances.

In Terms of Allocating Fixed Overhead Cost to Products,generally Accepted