Standard costs should be revised when they differ from actual costs.

Question

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Standard costs are predetermined or budgeted costs that are often used for planning and control purposes; they are not necessarily revised whenever they differ from actual costs. Variances between standard and actual costs are analyzed to understand the reasons for the differences, which can be due to changes in prices, efficiencies, or other factors. Revisions to standard costs are typically made on a periodic basis and in response to significant changes in the business environment, not automatically whenever there's a discrepancy with actual costs.

Standard Costs Should Be Revised When They Differ from Actual