An approach in which restating the amounts, in general ledgers by using actual cost rates, is classified as __________?
Correct answer: B. adjusted allocation rate approach
- A. unadjusted cost approach
- B. adjusted allocation rate approach
- C. unadjusted allocation approach
- D. adjusted cost approach
Explanation
The adjusted allocation-rate approach restates ledger amounts using actual cost-allocation rates. The unadjusted approaches retain the originally predetermined rates.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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