When factory overhead is applied to production, based on actual inputs multiplied by a predetermined application rate, the process is known as ____________.

Normal costing

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Actual costing

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Standard costing

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Historical costing

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Solution

The correct option is A Standard costing
An estimated or predetermined cost of producing a goods or services under the normal conditions is called as standard costing. Standard costing is used as a target cost and is predetermined on the basis of historical cost data.

Standard costing is used for comparing the actual to find out the variances.

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Similar questions

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