COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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TRUE
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FALSE
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Detailed explanation-1: -The best basis upon which cost standards should be set to measure controllable production inefficiencies is idle capacity.
Detailed explanation-2: -Q4. The standard most suitable from cost control point of view is: Normal standard.
Detailed explanation-3: -Standard cost relates to a product, service, process or an operation. It is also determined for a normal level of efficiency of operation. Standard cost is used to measure the efficiency of future production or future operations. For this reason, it provides a useful basis for cost control.
Detailed explanation-4: -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.