Which of the Following Is Not True Regarding Normal Costing

question 38

Multiple Choice

Which of the following is not true regarding normal costing systems?

• A) A normal costing system predetermines overhead costs.
• B) A normal costing system assigns direct materials and direct labor to products using a predetermined rate.
• C) In a normal costing system overhead is assigned using a budgeted rate and actual activity.
• D) A normal costing system has less capacity for control than a standard costing system.
• E) All of these statements are true.

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Definitions:

Interest Rates

The cost of borrowing money or the payment received for deposit funds, typically expressed as a percentage rate over the period of one year.

Bond's Price

The price of a bond is the present value of its expected future cash flows, such as interest payments and the return of principal at maturity.

Interest Rate Price Risk

The risk that the value of an investment will decrease due to a change in interest rates.

Zero Coupon Bond

A type of bond that does not pay interest during its life but is sold at a deep discount from its face value.