The Difference Between Standard Costs and Budgeted Costs Is That

question 57

Multiple Choice

The difference between standard costs and budgeted costs is that standard cost

• A)refers to a single unit while budgeted costs refer to the cost, at standard, for the total number of budgeted units.
• B)is calculated under ideal conditions, while budgeted costs are calculated for attainable conditions.
• C)is calculated for raw material while budgeted costs are calculated for direct labor.
• D)is part of the management accounting system, while budgets are part of the financial accounting system.

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.

Quantity Demanded

The total amount of goods or services that consumers are willing and able to purchase at a given price level.

Demand

The amount of a particular good or service that consumers are willing and able to purchase at various prices during a certain period of time.

Midpoint Formula

A more precise way of calculating percentages using the value halfway between P1 and P2 for the base in calculating the percentage change in price and the value halfway between Q1 and Q2 as the base for calculating the percentage change in quantity demanded.