Which of the following is one of the reasons why companies use standard costs?
A)to enhance customer loyalty
B)to set performance targets
C)to share best practices with other companies
D)to ensure the accuracy of the financial records

Question

Quizplus · Accepted Answer

Companies use standard costs to set performance targets for their operations, which helps them measure actual performance against the expected performance, identify areas of improvement and make necessary adjustments to achieve the desired results. Standard costs help companies to evaluate the efficiency and effectiveness of their operations, control costs and make informed decisions about pricing, product mix, and resource allocation. While accurate financial records are important, standard costs are not primarily used to ensure their accuracy. Similarly, while sharing best practices can help companies improve their operations, it is not a primary reason for using standard costs. Enhancing customer loyalty may be a goal for companies but is not directly related to the use of standard costs.

Which of the Following Is One of the Reasons Why