A company may set standards for the maximum cost that should be incurred to produce a
A)in the planning budgeting process.
B)in evaluating how well manufacturing operations are managed.
C)both in the planning budgeting process and in evaluating how well manufacturing operations are managed.
D)neither in the planning budgeting process nor in evaluating how well manufacturing operations are managed.

Question

Quizplus · Accepted Answer

A company may set standards for the maximum cost that should be incurred to produce a product both in the planning budgeting process and in evaluating how well manufacturing operations are managed. In the planning budgeting process, these standards help in estimating the cost of producing goods and the price at which they should be sold. In evaluating manufacturing operations, these standards help in comparing the actual cost of production with the budgeted cost, thereby identifying areas of inefficiency and taking corrective actions.

A Company May Set Standards for the Maximum Cost That