Colt Widgets prepared its income statement for management using a standard cost accounting system. Which of the following appears at the "standard" amount?
A) Sales
B) Selling expenses
C) Gross profit
D) Cost of goods sold

Question

Quizplus · Accepted Answer

In a standard cost accounting system, the cost of goods sold is calculated using predetermined standard costs for direct materials, direct labor, and overhead. Therefore, the cost of goods sold on the income statement will appear at the "standard" amount. Sales, selling expenses, and gross profit are all calculated based on actual sales and cost data, so they will not necessarily appear at the "standard" amount.

Colt Widgets Prepared Its Income Statement for Management Using a Standard