Standard Costs

question 41

Multiple Choice

Standard costs:

• A) allow a manager to assess the efficiency of operations.
• B) allow a company to practice management by exception.
• C) provide management with a basis for performance evaluations.
• D) if set correctly, can provide a motivational tool for employees.
• E) All of the answers are correct.

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Definitions:

Marginal Benefit

The extra utility or satisfaction garnered by consuming one more unit of a good or service.

Marginal Cost

The amount spent on generating an extra unit of a product or service.

Optimal Amount

The most efficient, effective or desirable quantity or level.

Pollution Abatement

Methods or processes implemented to reduce, control, or eliminate pollution from various sources.