One Reason Companies Use Standard Costs Is to Serve as a Standard

question 53

True/False

One reason companies use standard costs is to serve as a standard for judging performance.

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Definitions:

Product Costs

Product costs are the costs directly associated with the production of goods, including material, labor, and manufacturing overhead expenses.

Sales and Administrative Expenses

Expenses related to the selling of products and the administration of a business, not directly tied to the production process.

Not a Product Cost

An expense that is not directly associated with manufacturing or producing a product, typically including selling, general, and administrative expenses.

Maintenance Supplies

Consumable items used in the regular upkeep of equipment, machinery, or property.