A company may set standards for the maximum cost that should be incurred to produce a unit of product.Such cost standards are useful
A)in the directing process.
B)in evaluating how well manufacturing operations are managed.
C)in achieving zero defects.
D)In implementing a rolling budget.

Question

Quizplus · Accepted Answer

Cost standards are useful in evaluating how well manufacturing operations are managed because they provide a benchmark for comparing actual costs to expected costs. By analyzing the difference between the two, a company can identify areas that need improvement and take corrective actions to reduce costs and increase efficiency. Cost standards may also be used in the budgeting process, but this is not the primary purpose of setting them. Similarly, while achieving zero defects is an important goal for many companies, cost standards are not directly related to this objective.

A Company May Set Standards for the Maximum Cost That