The costs that should be incurred under normal conditions to produce a specific product or component or to perform a specific service are:
A) Variable costs.
B) Fixed costs.
C) Standard costs.
D) Product costs.
E) Period costs.

Question

Quizplus · Accepted Answer

Standard costs represent the expected costs under normal conditions to produce a specific product or component or to perform a specific service. Standard costs are used for budgeting, cost control, and performance evaluation purposes. They can include both variable and fixed costs. Product costs, on the other hand, refer to the costs incurred to produce or acquire a product for sale, while period costs relate to the costs incurred to support the operations of a business, such as selling, general, and administrative expenses.

The Costs That Should Be Incurred Under Normal Conditions to Produce