When using a standard costing system,direct material and direct labor are recorded at actual cost while manufacturing over is applied at a standard rate.

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In a standard costing system, direct materials, direct labor, and manufacturing overhead are all recorded at standard costs, not actual costs. The manufacturing overhead is applied at a predetermined standard rate based on estimated activity levels. Actual overhead costs are then compared to the applied overhead to determine if there was over or underapplied overhead.

When Using a Standard Costing System,direct Material and Direct Labor