At the end of the year,the direct costs traced to jobs using budgeted rates will always equal actual direct costs.

Question

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At the end of the fiscal year,the direct costs traced to jobs using budgeted rates will generally not equal actual direct costs because the actual rate and the budged rate are developed at different times using different information.End-of-year adjustments for under-or-over allocated direct costs would need to be made in the same way that adjustments are made for under-or overallocated indirect costs.

At the End of the Year,the Direct Costs Traced to Jobs