ECONOMICS

Detailed explanation-1: -So, we can conclude that the standard cost system is used in job order costing. And it is not applicable in process costing.

Detailed explanation-2: -Job order costing is used to value inventory when the product or service is made-to-order, and standard costing is used when products are identical to each other. Costs for raw materials, labor, and overhead are calculated and included in an item’s standard cost.

Detailed explanation-3: -Answer and Explanation: Option (D) is the correct answer. Standard cost is used as the tool for measuring efficiency for controlling the cost of production. Standard cost is part of the cost accounting process.

Detailed explanation-4: -Companies that produce a continuous flow of identical products often choose process costing systems. Standard costing systems allow companies to determine their expected cost for each product.

Detailed explanation-5: -What is standard costing? Standard costing is the practice of estimating the expense of a production process. It’s a branch of cost accounting that’s used by a manufacturer, for example, to plan their costs for the coming year on various expenses such as direct material, direct labor or overhead.