Standard costs
A)are estimates of costs attainable only under the most ideal conditions.
B)are difficult to use with a process costing system.
C)can,if properly used,help motivate employees.
D)require that significant unfavorable variances be investigated,but do not require that significant favorable variances be investigated.

Question

Quizplus · Accepted Answer

Standard costs can be used as a tool to motivate employees by providing a clear target for performance. However, this requires proper implementation and communication of the standards to employees. Option A is incorrect because standard costs are based on attainable costs under normal conditions, not just ideal ones. Option B is incorrect because standard costs can be used with both process and job costing systems. Option D is incorrect because both significant favorable and unfavorable variances should be investigated in order to understand the reasons behind the variances and improve future performance.

Standard Costs