Which of the Following Is True of Performance Standards

question 60

Multiple Choice

Which of the following is true of performance standards?

• A) Only numerical performance standards can be established.
• B) Performance standards should be established while the work is being performed.
• C) Only nonnumerical performance standards can be established.
• D) Performance standards should be established before the work is performed.

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Definitions:

Selling and Administrative Expense

Costs related to the selling of products and the administration of a business, not including production costs.

Variable Expense

Expenses that change in proportion to the activity of a business.

Fixed Expense

Costs that do not vary with the level of production or sales, such as rent or salaries.

Variable Overhead Rate

The rate at which variable overhead costs are allocated to products based on an activity base, such as machine-hours or direct labor-hours, reflecting changes in cost with production volume.