Standard Costs Are Said to Be Useful in Performance Evaluation

question 17

Essay

Standard costs are said to be useful in performance evaluation. Assume that the standard direct materials cost per unit of finished product is $6 (three pounds at $2 per pound).
Required:
A. Explain how such a standard can be used to evaluate performance.
B. Why is the degree of controllability important when utilizing standard costs to evaluate performance?

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Definitions:

Debut

The first public appearance or introduction of someone or something, such as an artist, a product, or a performance to the public.

Total Disaster

A situation that has resulted in complete failure, often involving widespread damage or chaos.

Trumpet Valves

Mechanisms in a trumpet that, when operated, adjust the flow of air through the instrument's tubing to change the pitch.

Gilberto

A personal name, possibly of Portuguese or Italian origin, without a specific widely-recognized definition in a general context.