Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs?
A) Used to indicate where changes in technology and machinery need to be made.
B) Used to identify inventory
C) Used to plan direct materials, direct labor, and factory factory overhead.
D) Used to control costs.

Question

Quizplus · Accepted Answer

Standard costs are used mainly to plan, control, and evaluate performance. While standard costs may theoretically indicate where changes in technology and machinery might be needed, that is not a common use of them. This is not a benefit of using a standard cost system.

Standard Costs Are Used in Companies for a Variety of Reasons