Which of the Following Statements About Normal Costing Is True

question 42

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:

Quality Control Chart

A graphic representation of process data over time, used to monitor the quality of processes.

Central Tendency

A statistical measure that identifies a single value as representative of a dataset, typically through the mean, median, or mode.

Measuring Samples

The act of collecting and analyzing a subset of data from a larger population to draw conclusions or make predictions.