Question

Using normal costing rather than actual costing requires that the allocating of indirect manufacturing costs to work-in-process be

A. done on a more timely basis, such as every two weeks rather than every month.

B. journalized only at year end when adjusting entries are normally made.

C. calculated by using the budgeted rate times actual quantity of allocation base.

D. calculated by using the budgeted rate times the budgeted quantity of allocation base.

Answer 1

Using normal costing requires calculating indirect manufacturing costs based on the budgeted rate multiplied by the budgeted quantity of allocation base.

Step-by-step explanation:

The correct answer is D. Using normal costing rather than actual costing requires that the allocating of indirect manufacturing costs to work-in-process be calculated by using the budgeted rate times the budgeted quantity of allocation base.