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.

Question

Quizplus · Accepted Answer

B is incorrect because a normal costing system assigns direct materials and direct labor to products based on their actual costs, not using a predetermined rate. Predetermined rates are used for assigning overhead costs in normal costing, not for direct materials and direct labor.

Which of the Following Is Not True Regarding Normal Costing