Standards Are Likely to Be Most Useful When Expressed In

question 5

Multiple Choice

Standards are likely to be most useful when expressed in:

• A) dollars per unit of input to the manufacturing process.
• B) quantities per unit of output from the process being evaluated.
• C) total costs for the accounting period for the department being evaluated.
• D)terms easily related to by the individual whose performance is being evaluated.

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Definitions:

Standard Cost System

An accounting system that uses predetermined costs for product costing and decision making, facilitating budgeting and variance analysis.

Standards

Criteria or benchmarks used for measuring performance or quality in various fields, including manufacturing, auditing, and accounting.

Actual Information

Factual data or evidence that is true and accurate, without alteration or distortion.

Raw Materials Quantity Variance

The difference between the actual quantity of raw materials used in production and the estimated quantity expected to be used, measured in terms of cost.