All of the Following Are Advantages of Using Standard Costs

question 103

Multiple Choice

All of the following are advantages of using standard costs except

• A)managers can evaluate the efficiency of production workers.
• B)differences between the static budget and the flexible budget can be broken down into price and quantity components.
• C)consumer motivation for purchases can be analyzed.
• D)standard costing allows companies to create flexible budgets.

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Definitions:

Reporting Unit

A component of an entity for which discrete financial information is available and is reviewed regularly by the operating segment's management.

Fair Value

The sum fetched from the sale of an asset or spent on the transition of a liability in a smooth transaction involving market participants at the time of assessment.

Foreign Currency Nonmonetary Assets

Assets that are not in cash and are not expected to be converted into cash in the near future, valued in a currency other than the entity's functional currency.

Historic Rate

The exchange rate at which a transaction was executed in the past, used for recording foreign currency transactions in financial statements.