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A Normal Cost System Applies Overhead to Jobs

A normal cost system applies overhead to jobs _______.

A) by multiplying a predetermined overhead rate by the estimated amount of the allocation base incurred by the job.
B) by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job.
C) using the actual amount of overhead caused by each job.
D) using the normal amount of overhead caused by each job.




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1 Answer

  1. The correct answer is:

    B) by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job.

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