Which of the Following Statements About Standard Costs Is False

question 232

Multiple Choice

Which of the following statements about standard costs is false?

• A) Properly set standards should promote efficiency.
• B) Standard costs facilitate management planning.
• C) Standards should not be used in "management by exception."
• D) Standard costs can simplify the costing of inventories.

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Definitions:

Production

The process of creating goods or services by combining various inputs like labor, raw materials, and machinery.

Marginal Productivity

Marginal productivity refers to the additional output that is produced by adding one more unit of a factor of production, holding all other factors constant.

Labor

Labor refers to the human effort, both physical and mental, used in the production of goods and services, forming a crucial component of the economic production process.

Isoquant

A curve illustrating all possible combinations of inputs that yield the same quantity of output, demonstrating how firms can substitute between different factors of production to maintain output levels.