Which of the Following Statements About the Standard Variable Factory

Multiple Choice

Which of the following statements about the standard variable factory overhead application rate is true?

A) The rate is a function of the denominator volume chosen.
B) The rate is used for cost-control, but not product-costing purposes.
C) The rate is used for product-costing, but not cost-control purposes.
D) The same rate is used for product-costing and cost-control purposes.
E) Generally speaking, the rate will be independent of the allocation base chosen to apply overhead.