A standard costing system
A)is used by management for cost planning,but not for cost control purposes.
B)is a system in which all costs affecting the three inventory accounts and the Cost of Goods Sold account are stated in terms of actual costs incurred.
C)depends on actual costs rather than planned costs.
D)is employed with an existing job order costing or process costing system and is not a full cost accounting system in itself.

Question

Quizplus · Accepted Answer

A standard costing system is employed with an existing job order costing or process costing system and is not a full cost accounting system in itself. It is a method of setting predetermined estimates for the cost of direct materials, direct labor, and overhead that should be incurred under normal conditions. The actual costs are then compared to the standard costs for variances analysis, which is used for cost control purposes.

A Standard Costing System