The following data apply to Walker Corporation for the year 20X4.

-The costing system that uses actual direct labour and materials cost but uses standards for applying overhead is called
A) actual costing.
B) standard costing.
C) variance costing.
D) normal costing.

Question

The following data apply to Walker Corporation for the year 20X4.
 
-The costing system that uses actual direct labour and materials cost but uses standards for applying overhead is called
A) actual costing. 
B) standard costing. 
C) variance costing. 
D) normal costing.

Quizplus · Accepted Answer

The given data suggests that Walker Corporation uses actual direct labour and materials cost but standards for applying overhead. This is consistent with the definition of normal costing, which uses actual direct costs but applies overhead using predetermined rates or standards. Therefore, D is the best choice. Actual costing (A) would only use actual costs for both materials, labour and overheads. Standard costing (B) uses predetermined standards for all costs, including materials, labour and overheads. Variance costing (C) refers to the analysis and accounting of variances between actual costs and standards, but it is not a standalone costing system.

The Following Data Apply to Walker Corporation for the Year