Which of the Following Statements Concerning Practical Standards Is NOT

question 216

Multiple Choice

Which of the following statements concerning practical standards is NOT correct?

• A) Practical standards can be used for product costing and cash budgeting.
• B) Practical standards can be attained by the average worker.
• C) When practical standards are used; there is no reason to adjust standards if an old machine is replaced by a newer, faster machine.
• D) Under practical standards, large variances are less likely than under ideal standards.

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Definitions:

Information Technology

The use of computers, networking, and other physical devices, infrastructure, and processes to create, process, store, secure, and exchange all forms of electronic data.

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and cost of goods sold based on the average cost of all units available for sale during the period.

Materials Preparation

The process involved in getting raw materials ready for production or manufacturing, including cleaning, sorting, and pre-processing steps.

Equivalent Units

A concept in cost accounting used to estimate the amount of finished units that could be obtained from a set of partially completed units.