A company might use ................ normalbudgetedvariableabsorbed costs rather than Answer costs to compute direct labour rates because it may be difficult to trace direct labour costs to jobs as they are completed.

The Production Overhead Control account aggregates the actual Answer costs incurred while Production Overhead Allocated allocates overhead costs to jobs on the basis of a Answeractualbudgetednormal rate times the Answernormalbudgetedactual quantity of the cost-allocation base.

Answer-allocation or over-allocation of indirect (overhead) costs can arise because of (1) the Numerator reason--the actual overhead costs differ from the budgeted overhead costs, or (2) the Denominator reason--the actual Answer used of the allocation base differs from the budgeted quantity.

Writing-off under- or over-allocated overhead to cost of goods sold is acceptable for immaterial amounts. However, when the amount is Answer it becomes important for the work in process and finished goods accounts to be adjusted.