Which of the following is not a drawback of actual costing?
A) Costs are subject to cyclicality.
B) Costs avoid the estimation associated with predetermined overhead rates.
C) Costs may not be evenly spread throughout the year due to large payments for overhead costs.
D) Actual overhead costs may only be available after a production period has passed.
E) All of these are drawbacks of actual costing.

Question

Quizplus · Accepted Answer

Actual costing avoids the estimation associated with predetermined overhead rates, which is considered an advantage, not a drawback. This method uses actual costs incurred, providing a more accurate reflection of costs for a specific period.

Which of the Following Is Not a Drawback of Actual