Day: November 16, 2017

Standard cost is best defined as which of the following?

Select ONE answer:

1. The actual unit cost of a product produced in a period of time
2. The actual average unit cost of a product produced in a period of time
3. The planned unit cost of a product produced in a period of time
4. The planned average cost of a product produced in a period of time
5. The variable unit cost of a product produced in a period of time

What are the advantages and disadvantages of standard costing?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 3 – A standard cost has been described as a predetermined cost, an estimated future cost, an expected cost, a budgeted unit cost, a forecast cost, or a “should be” cost. Standard costs are often a part of a manufacturer’s annual profit plan and operating budgets. Standard costs will be established for the following year’s direct materials, direct labour, and manufacturing overhead.

This work is licensed under a Creative Commons Attribution 4.0 International License.