A Normal Costing System Uses Actual Costs for Direct Materials

question 18

Multiple Choice

A normal costing system uses actual costs for direct materials and direct labor,and:

• A)Budgeted costs for factory overhead.
• B)Estimated factory overhead costs based on material cost.
• C)Estimated factory overhead costs based on labor cost.
• D)Estimated costs for factory overhead.
• E)Charges actual factory overhead as a lump sum.

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Definitions:

Free Economy

An economic system where transactions are under the control of private owners for profit rather than by the state.

Utilitarianism

A theory in normative ethics holding that the best action is the one that maximizes utility, often defined as maximizing happiness and reducing suffering.

Greatest Good

A concept often associated with utilitarianism, suggesting that actions are right if they benefit the majority, promoting the most happiness or least harm.

Laws

The system of rules that are created and enforced through social or governmental institutions to regulate behavior and maintain order in society.