Disadvantages of Using Standard Costs and Variances Include All of the Following

question 77

Multiple Choice

Disadvantages of using standard costs and variances include all of the following except

• A)the excessive cost to keep standards up-to-date.
• B)companies that pay employees a salary because direct labor is a fixed cost rather than a variable cost.
• C)those manufacturing costs that enter Work in Process Inventory are recorded at standard cost, rather than actual cost.
• D)traditional standards can promote unfavorable employee behavior.

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Definitions:

Substitute Physician

A medical doctor who temporarily fills in for another physician, often referred to as a locum tenens.

Locum Tenens

A person who temporarily fulfills the duties of another; specifically, a physician or clergyman acting temporarily for another.

Res Ipsa Loquitur

Latin, meaning “the thing speaks for itself,” which is also known as the doctrine of common knowledge.

Respondeat Superior

Latin, meaning “let the master answer,” a doctrine under which an employer is legally liable for the acts of his or her employees, if such acts were performed within the scope of the employee’s duties.