What Results from Implementing Standard Cost Systems in Manufacturing Environments

question 3

Multiple Choice

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

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

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Definitions:

Actor/observer Bias

The tendency to attribute one's own actions to external factors while attributing others' actions to their character or disposition.

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes but sometimes lead to biased or inaccurate judgments.

Intentions

Planned or desired outcomes that an individual seeks to achieve through specific actions.

Actions

Behaviours or deeds performed by individuals in response to external or internal stimuli.