A normal costing system uses the following:

Question

Quizplus · Accepted Answer

A normal costing system typically uses actual direct material and actual direct labour, but applies overhead based on a predetermined overhead rate. This means that actual overhead costs are not used, but rather an estimated overhead cost based on a predetermined rate applied to actual direct labour hours or other cost drivers. Therefore, the best choice is B, which includes actual direct material and direct labour costs, but also includes applied overhead.

A Normal Costing System Uses the Following