Standard costing
A)establishes price and quantity standards for inputs.
B)provides journal entry support.
C)is not used in unit costing.
D)none of these.

Question

Quizplus · Accepted Answer

Standard costing involves setting up predetermined standards for price and quantity of inputs that should be used in the production process. This enables companies to compare actual costs with the budgeted or standard costs, and identify areas where cost savings can be made or improvement in efficiency can be achieved. Standard costing also provides a basis for calculating variances (both favourable and unfavourable) and for determining whether the actual results are within the acceptable range of tolerance. Therefore, option A is the best choice.

Standard Costing