In a standard costing system, overhead is applied to inventory using the
A) flexible overhead rate.
B) standard overhead rate.
C) flexible variable rate.
D) standard variable rate.

Question

Quizplus · Accepted Answer

In a standard costing system, overhead is applied using a standard overhead rate. This rate is predetermined and based on expected costs for a given period. The actual overhead costs incurred during the period are later compared to the applied overhead costs to determine if there is any variance.

In a Standard Costing System, Overhead Is Applied to Inventory