COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When the price of materials increase in the market, the standard cost of materials should be revised.
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True
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Explanation:
Detailed explanation-3: -Standard costs should be updated at least annually and more frequently in times of economic turbulence.
Detailed explanation-4: -A standard cost is a planned or budgeted cost. A standard cost is based on engineering designs and production methodologies, which can be attained under normal operating conditions. It is comprised of material, labor, and overhead components, and is typically recorded within a bill of materials.
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