Asked by Xhorxhina Gjoni on Jul 21, 2024
Verified
Which of the following statements is not true about the use of a standard cost system
A) Standards can be used by individuals to judge their own performance.
B) A favourable variance will always be good thing for a business.
C) The use of standard costs can greatly simplify bookkeeping.
D) As long as costs do not fall significantly outside of standards managers can usually focus on other issues.
Standard Cost System
A cost accounting system that uses cost standards for materials, labor, and overhead to control actual costs and analyze variances.
Favourable Variance
A financial term referring to a situation where actual costs are less than budgeted costs, or actual revenues exceed budgeted revenues.
Variable Overhead Efficiency Variance
A measure of the difference between the expected variable overhead based on standard costs and the actual variable overhead incurred.
- Analyze the origins and outcomes of beneficial and harmful variances.
Verified Answer
Learning Objectives
- Analyze the origins and outcomes of beneficial and harmful variances.
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