Q642
An approach which yields benefits of normal costing and actual manufacturing overhead is classified as
A.
unadjusted allocation rate approach
B.
adjusted budget rate approach
C.
unadjusted budget rate approach
D.
adjusted allocation rate approach
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
An approach which yields benefits of normal costing and actual manufacturing overhead is classified as adjusted allocation rate approach. The adjusted allocation-rate approach restates or corrects estimated overhead costs booked throughout the year, so that the actual overhead costs are recorded properly.