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:

Portfolio AB

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs.

Correlation

A statistical measure that describes the extent to which two variables change together, indicating the strength and direction of their relationship.

Randomly Selected Stocks

Shares from various companies chosen without any specific criteria or bias, often used for creating a diversified investment portfolio.

Market Risk

The risk of losses in investments due to factors that affect the entire market or economy.