Which of the Following Statements About Normal Costing Is TRUE

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.