In some service organizations, a variation of normal costing is used to provide timely information during the progression of the year, using budgeted direct labor costs and allocated budgeted overhead.

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Quizplus · Accepted Answer

This statement is true. Normal costing involves allocating overhead costs based on predetermined rates, using budgeted direct labor costs as the allocation base. This allows service organizations to track costs and performance throughout the year, rather than waiting until the end of the year to calculate actual costs.

In Some Service Organizations, a Variation of Normal Costing Is