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:

Average Tax Rate

The proportion of total income that is paid as tax, calculated by dividing the total amount of tax paid by the total income.

Personal Income

The total amount of income earned by individuals from all sources, including wages, dividends, and interest, before taxes.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare among stakeholders.

Elastic Demand

Elastic demand refers to a situation where the quantity demanded of a product or service significantly changes in response to changes in its price.