In normal costing, the budgeted rate is multiplied to an actual quantity, which have been used as the allocation base to calculate ___________?
Correct answer: B. manufacturing overhead applied
- A. budget overhead applied
- B. manufacturing overhead applied
- C. labor overhead applied
- D. none of aboveAccounting & Auditing
Explanation
Under normal costing, the predetermined overhead rate is multiplied by the actual allocation-base quantity to determine manufacturing overhead applied. Budgeted overhead is used to calculate the rate, not the applied amount itself.
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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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