The Statement Concerning Actual and Normal Costing That Is True

question 93

Multiple Choice

The statement concerning actual and normal costing that is true is:

• A) Information from normal costing is used for pricing purposes
• B) Actual costing is carried out at the beginning of the accounting period
• C) Under actual costing direct labour is traced to a job and under normal costing it is allocated
• D) Over or under applied overhead does not exist in normal costing.

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Definitions:

Net Income

The total amount of profit earned by a company after all expenses and taxes have been deducted from revenue.

Consolidated Financial Statements

Combined financial statements of a parent company and its subsidiaries, showing the financial results and financial position as if the group were a single entity.

Common Stock

Equity ownership in a corporation, granting shareholders voting rights and a share in the company's profits via dividends, pertaining to the fundamental stake in the company’s equity.