Asked by Brittany McCord on Jun 05, 2024
Verified
It is possible that a company's financial statements may report inventories at
A) budgeted costs.
B) standard costs.
C) both budgeted and standard costs.
D) None of these answers are correct.
Financial Statements
Formal records of the financial activities and position of a business, individual, or other entity.
Standard Costs
Predetermined costs to manufacture a single unit of product, used as a benchmark for measuring the actual costs incurred.
- Understand the role and value of standard costs in cost accounting methodologies.
Verified Answer
CB
Christopher BrownJun 08, 2024
Final Answer :
B
Explanation :
Inventories can be reported at standard costs, which are predetermined costs that companies use for budgeting and assessing performance. Standard costs are used in accounting to value inventory and to record cost of goods sold, providing a way to compare actual costs to expected costs. Budgeted costs, on the other hand, are projections for future periods and are not used to report inventories in financial statements.
Learning Objectives
- Understand the role and value of standard costs in cost accounting methodologies.
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