The primary difference between normalized and actual costing methods lies in the determination of a job's:
A)direct material costs.
B)direct labour costs.
C)manufacturing overhead costs.
D)selling costs.
E)administrative costs.

Question

Quizplus · Accepted Answer

Normalizing costing involves allocating overhead based on a predetermined rate per unit, while actual costing calculates overhead based on the actual costs incurred during production. Therefore, the primary difference between the two methods lies in the determination of a job's manufacturing overhead costs. Direct material and direct labour costs are typically tracked and assigned directly to the job, while selling and administrative costs are not included in either method.

The Primary Difference Between Normalized and Actual Costing Methods Lies