When Using a Normal Costing System

question 27

Multiple Choice

When using a normal costing system

• A)Direct material and direct labor are recorded at standard cost and overhead is applied to products using a predetermined overhead rate.
• B)Direct material and direct labor are recorded at actual cost and overhead is treated as a period cost.
• C)Direct material and direct labor are recorded at actual cost and overhead is applied to products using a predetermined overhead rate.
• D)Direct material and direct labor are recorded at standard cost and overhead is treated as a period cost.

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Definitions:

Expected Value

The weighted average of all possible values of a random variable, considering the probabilities of each outcome.

Fixed Salary

A set amount of money paid to an employee by an employer at regular intervals, regardless of hours worked, providing income stability.

Expected Value

A statistical concept that represents the average outcome when the same event is repeated multiple times.

Utility

In economics, the satisfaction or pleasure that consumers derive from consuming goods or services.