Question

The advantage of using normal costing instead of actual costing is:

A) indirect costs are assigned at the end of the year when they are known
B) the job cost is more accurate under normal costing
C) indirect costs are assigned to a job on a timely basis
D) normal costing provides a higher gross profit margin

Answer 1

The advantage of using normal costing instead of actual costing is that indirect costs are assigned to a job on a timely basis.

Step-by-step explanation:

The advantage of using normal costing instead of actual costing is that indirect costs are assigned to a job on a timely basis. With normal costing, indirect costs are allocated to a job based on predetermined rates or percentages, which can be calculated at the beginning of the year. This allows for more accurate job cost calculations throughout the year, as indirect costs are assigned in a timely manner rather than waiting until the end of the year like in actual costing.