Why Are Standard Cost Systems Adopted

question 88

Multiple Choice

Why are standard cost systems adopted?

• A) to collect additional information
• B) to increase efficiency in a just-in-time environment
• C) to improve planning and control, and to facilitate product costing
• D) to enhance the operational control of firms that emphasize continuous improvement

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Definitions:

Retained Earnings

The portion of net earnings not distributed as dividends to shareholders but retained by the company to reinvest in its core business or to pay debt.

Net Income

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue.

Dividend

A payout of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Treasury Stock

Treasury stock represents shares of a company's own stock that it has reacquired and holds, which do not confer voting rights or dividend payments.