Actual costing is a costing system that traces direct costs to a cost object by ________.
A) using the budgeted direct cost rates times the budgeted quantities of direct-cost inputs
B) using the actual direct costs rates times the budgeted quantities of the direct-cost inputs
C) using the actual direct cost rates times the actual quantities of the direct-cost inputs
D) using the budgeted direct cost rates times the actual quantities of the direct cost inputs

Question

Quizplus · Accepted Answer

Actual costing traces direct costs by using the actual direct cost rates times the actual quantities of the direct-cost inputs. This provides a more accurate reflection of the actual costs incurred for a specific cost object, compared to using budgeted rates or quantities.

Actual Costing Is a Costing System That Traces Direct Costs