The advantage of using normal costing instead of actual costing is:
indirect costs are assigned at the end of the year when they are known
the job is more accurate under normal costing
indirect costs are assigned to a job on a timely basis
normal costing provides a higher gross profit margin
The adjusted allocation approach yields the benefits of _____________.
timeliness and convenience of normal costing
allocating budgeted manufacturing overhead costs at the end of the year
write-off to the cost of goods sold approach
the proration approach
If indirect-cost rates are calculated monthly, distortions might occur because of ________.
rental costs paid monthly
property tax payments made in July and December
routine monthly preventive-maintenance costs that benefit future months
salary hikes at the beginning of the financial year
The ending balance in the Work-in-Process Control account represents the costs of all jobs that ________.
have not been completed
have been completed but not sold
have been completed and sold to customers
are reported on the income statement
Payment of the factory rent increases the ________.
Work-in-Process Control account
Manufacturing Overhead Control account
Cost of Goods Sold account
Factory Depreciation account
When a job is complete ________.
actual indirect manufacturing labor is excluded from the total cost of the job
Finished Goods Control is debited
the cost of the job is transferred to Manufacturing Overhead Control
it is reduced from Manufacturing Overhead Control account
