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Manufacturing firms can use actual costing or normal costing to determine the costs of their products. A survey shows that most company do not use

Manufacturing firms can use actual costing or normal costing to determine the costs of their products. A survey shows that most company do not use the actual costing system to cost their products and services. Instead, normal costing system is commonly used. Required: (a) What is normal costing system and explain how it is different from actual costing? (b) Explain why most companies prefer to use normal costing system instead of the actual costing system.

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