If standard costs are incorporated into the accounting system,
A)it may simplify the costing of inventories and reduce clerical costs.
B)it can eliminate the need for the budgeting process.
C)the accounting system will produce information which is less relevant than the historical cost accounting system.
D)approval of the stockholders is required.

Question

Quizplus · Accepted Answer

Standard costs can simplify the costing of inventories and reduce clerical costs by providing a pre-determined cost for each unit of production. This makes it easier to track and allocate costs to inventory items. It does not eliminate the need for the budgeting process, and the accounting system can still provide relevant information for decision-making. Approval of stockholders is not required for implementing standard costs in the accounting system.

If Standard Costs Are Incorporated into the Accounting System