Which of the following is a reason companies use standard costs?
A) to enhance customer loyalty
B) to ensure the accuracy of the financial records
C) to share best practices with other companies
D) to identify performance standards

Question

Quizplus · Accepted Answer

Standard costs are used to identify performance standards by providing a basis for comparing actual costs to expected or budgeted costs. This allows companies to analyze and improve their performance, identify areas where costs can be reduced, and set benchmarks for future performance. Standard costs also help companies to prepare accurate financial statements by providing a more precise estimate of the cost of goods sold and inventory valuation.

Which of the Following Is a Reason Companies Use Standard