Which of the Following Statements Is True of Standard Cost

question 26

Multiple Choice

Which of the following statements is true of standard cost?

• A)It is equal to the actual cost of one unit of product.
• B)It is the amount management thinks that one unit of product should cost.
• C)It allows companies to generate more favorable than unfavorable variances.
• D)It is often calculated after production for the period is complete.

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Definitions:

Pareto Optimal Allocation

An allocation of resources from which it is impossible to reallocate so as to make any one individual better off without making at least one individual worse off.

Utility Function

A mathematical model in economics that represents an individual's preference system, used to rank choices in order of preference.

Apples

In economic terms, apples can serve as an example of a consumer good, whose supply and demand can be analyzed to understand market dynamics.

Bromides

Compounds containing the bromide ion or compounds that act as a sedative; colloquially used to refer to common sayings or platitudes that lack originality.