Which of the Following Statements About Normal Costing Is TRUE

question 98

Multiple Choice

Which of the following statements about normal costing is TRUE?

• A)Direct costs and indirect costs are allocated using an actual rate.
• B)Direct costs and indirect costs are traced using budgeted rates.
• C)Direct costs are traced using a budgeted rate, and indirect costs are allocated using an actual rate.
• D)Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate.
• E)Direct costs are traced by using the actual direct-cost rate times the budgeted quantity of the direct costs input.

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Definitions:

Less Concentrated

Refers to an industry or market where power and resources are spread out among many competitors, reducing the level of competition.

Vital Inputs

Crucial resources or components required for the production process or for providing a service.

Homogenous Inputs

Inputs or resources used in production that are of the same kind and interchangeable, contributing to uniformity in the manufacturing process.

IO Perspective

Refers to the Industrial Organization perspective, which examines the behavior of firms, market structures, and their interactions within an industry.