In a production setting, the standard cost of a unit of output is the sum of the standard costs of:
A) Direct material, direct labour, and variable overhead
B) Direct material, direct labour, and fixed overhead
C) Direct material, direct labour, variable overhead, and fixed overhead
D) Direct material, direct labour, and period costs

Question

Quizplus · Accepted Answer

The standard cost of a unit of output includes all the costs directly associated with its production, which are direct material, direct labour, variable overhead, and fixed overhead. Period costs are not included as they are not directly tied to the production process.

In a Production Setting, the Standard Cost of a Unit