Using normal costing the amount of supervisory salaries to allocate is determined by calculating

Question

Quizplus · Accepted Answer

Normal costing uses budgeted indirect-cost rates, rather than actual rates, and applies them to actual quantities of cost-allocation bases to determine the amount of overhead to allocate. Choice A is incorrect because it uses actual direct-cost rates and quantities, which is not relevant to allocating indirect overhead costs. Choice B is incorrect because it uses actual indirect-cost rates and quantities, which do not reflect the budgeted (or planned) amounts of indirect costs. Choice C is incorrect because it uses actual direct-cost rates and budgeted quantities, which again do not reflect the budgeted (or planned) amounts of indirect costs.

Using Normal Costing the Amount of Supervisory Salaries to Allocate