COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A standard cost is more accurate than a budgeted cost.
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A standard is a unit amount.
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In concept, standards and budgets are essentially the same.
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The standard cost of a product is equivalent to the budgeted cost per unit of product.
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Detailed explanation-1: -A standard cost is more accurate than a budgeted cost. If standard costs are incorporated into the accounting system, it may simplify the costing of inventories and reduce clerical costs.
Detailed explanation-2: -The answer is c) Variances falling outside of an acceptable range of outcomes do not require investigation.
Detailed explanation-3: -Option C is correct as standard costing systems are used for both cost control and product costing, including the variances in the direct material purchase and the cost, incurred until it becomes finished goods.
Detailed explanation-4: -Budgets are expressed in a total amount, normally for the period of a year. A standard is expressed at a unit amount and is normally used in manufacturing when trying to determine the cost of each unit produced and how much the company expects to sell it for.