Asked by Blake cannistraro on May 21, 2024
Verified
Define ideal and normal standards. Which type of standard should be used and why?
Ideal Standards
Strictly defined benchmarks in cost accounting that assume perfect efficiency and effectiveness in operation.
Normal Standards
Benchmarks used for budgeting and performance evaluation, representing expected efficiency and costs under normal conditions.
- Identify various categories of benchmarks (ideal, standard, presently achievable).
Verified Answer
MC
Michaela Cheng
May 25, 2024
Final Answer :
Ideal standards are standards that are only achievable under perfect operating conditions. Normal standards (also called currently attainable standards) allow for normal difficulties and mistakes. They can be attained with reasonable effort.
Companies should use normal standards because employees are more likely to put forth their best efforts when standards are reasonable. The use of ideal standards may have a negative impact on performance because they are likely to be viewed by employees as unrealistic.
Companies should use normal standards because employees are more likely to put forth their best efforts when standards are reasonable. The use of ideal standards may have a negative impact on performance because they are likely to be viewed by employees as unrealistic.
Learning Objectives
- Identify various categories of benchmarks (ideal, standard, presently achievable).