Standard costs should be based on:
A) perfect performance.
B) an average of past costs.
C) most likely level of performance.
D) reasonably attainable levels of efficiency.

Question

Quizplus · Accepted Answer

Standard costs should be based on reasonably attainable levels of efficiency, which take into account the current level of technology, workforce skill levels, and other factors that could affect performance. Perfect performance (A) is not realistic, an average of past costs (B) does not account for changes in the business environment and most likely level of performance (C) may not be ambitious enough to encourage improvements.

Standard Costs Should Be Based On