Which of the Following Is a Characteristic of Normal Costing

question 1

Multiple Choice

Which of the following is a characteristic of normal costing?

• A)Actual overhead costs are not assigned directly to jobs.
• B)Predetermined rates are not used to assign overhead.
• C)Applied overhead is not calculated on a job-specific basis.
• D)Plant-wide and departmental rates cannot be used to assign overhead.

Understand the differences between plantwide and departmental overhead rates.

Understand the distinction between direct and indirect costs in manufacturing.

Grasp the concepts of prime cost and conversion cost and their components.

Identify the classification of various costs within a manufacturing environment.

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Definitions:

Negotiable Warehouse Receipt

A document used in the trading of stored goods which proves the holder is entitled to take possession of the goods, and it is transferable by endorsement.

Bailee's Consent

the agreement or permission given by a bailee, a person or entity in temporary possession of another's property, to perform a certain action with or pertaining to that property.

Method of Payment

This refers to the way in which a payment is made for a transaction, which can include cash, credit card, cheque, or electronic transfers.

Single Delivery

Refers to the process where all goods under a contract are delivered at once, rather than in separate instalments.