Which of the following statements is true

Which of the following statements is true

Which of the following statements is true?

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In a standard cost system, overhead is applied on the basis of the actual level of activity rather than the standard level of activity allowed for the output of a period.

A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours. The company’s choice of the denominator level of activity has no effect on the fixed overhead budget variance.

A)  Statement I

B)  Statement II

C) Neither statement is true.

D)  Both statements are true.

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