Match each item with the correct statement below.
-An approach that assigns the actual costs of direct materials and direct labor to products but uses a predetermined rate to assign overhead costs
A)actual cost system
B)job-order costing system
C)normal cost system
D)process-costing system

Question

Quizplus · Accepted Answer

The description matches the normal cost system, which uses actual direct materials and direct labor costs but estimates overhead costs using a predetermined rate.

Answer: B
 The job-order costing system is used when products are made to order or in small batches, allowing for the direct costs of materials and labor to be assigned to each job.

Answer: D
 The process-costing system is used when products are mass-produced, and the costs of materials, labor, and overhead are accumulated and averaged over all units produced.

Answer: A
 The actual cost system assigns the true costs of direct materials, direct labor, and overhead to products without using predetermined rates or estimates.

Match Each Item with the Correct Statement Below