Which of the Following Statements About Normal Costing Is True

question 9

Multiple Choice

Which of the following statements about normal costing is true?

• A) Direct costs and indirect costs are traced 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.

---

Definitions:

Separate Products

The practice of distinguishing products in the market by features, quality, or price to cater to different consumer segments.

Low-fat Snack

A snack item designed to contain a lower amount of fat compared to regular versions, catering to health-conscious consumers.

Head-to-head Positioning

A marketing strategy where a company directly competes with another by targeting the same customer base with similar products.

Trading Down

Reducing a product’s number of features, quality, or price.