What Results from Implementing Standard Cost Systems in Manufacturing Environments

question 6

Multiple Choice

What results from implementing standard cost systems in manufacturing environments that emphasize continuous improvement and just-in-time manufacturing and purchasing?

• A) The standard cost system enhances the operational control.
• B) The operational level will benefit from the detailed computation of variances.
• C) Variances can be computed and presented in reports to higher-level managers.
• D) The materials price variance may encourage the purchasing department to buy in smaller quantities to reduce inventories.

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Definitions:

Physical World

The physical world refers to all of the planets, stars, galaxies, and all matter and energy that exists in the universe, as well as all the physical and natural laws that govern them.

Normal Accident

A theory suggesting that complex systems such as nuclear power plants are inherently susceptible to failures, no matter how well they are managed.

Risk Society

A society increasingly preoccupied with the future and also with safety, addressing and managing risks that modernity itself has produced.

Technopoly

A society which is overly dependent on technology, leading to potential negative effects on culture, society, and human well-being.