Cost accounting

What is an Applied Cost?

What is an Applied Cost? An applied cost is a cost that has been applied to a cost object, such as a product, department, or activity. A predetermined allocation rate is typically used to assign costs to cost objects. The allocation rate is based on the planned amount of the cost pool and a planned activity level. If the actual costs and production volumes turn out to be different, an adjustment to the allocation rate may be made partway through…

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