A standard cost is
A) the actual cost of a unit of production.
B) a budget for the production of one unit of a product or service.
C) useful in calculating equivalent units.
D) the average cost within the industry.

Question

Quizplus · Accepted Answer

A standard cost is a predetermined budget or target for the production of one unit of a product or service. It is not the actual cost, which may vary based on factors such as fluctuations in raw material prices or unexpected production issues. Standard costs are useful for evaluating performance and efficiency, as they provide a benchmark for comparison against actual costs.

A Standard Cost Is