The Use of Normal Costing with Absorption Costing

question 23

Multiple Choice

The use of normal costing with absorption costing

• A)is used because it is easier than actual costing with absorption costing.
• B)is used because it is more practical than actual costing.
• C)is essentially the same as using actual costing; accountants have created the term for the sake of semantics.
• D)means that only normal costs are used in assigning costs to production; any unexpected costs that occur are immediately expenses as period costs.

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Definitions:

Budgeted Balance Sheet

A financial statement that projects the financial position of a company for a future period, based on expected income and expenditure.