Which of the Following Is the Performance Standard Usually Considered

question 36

Multiple Choice

Which of the following is the performance standard usually considered best in setting standard costs?

• A) Profitable
• B) Optimal
• C) Attainable
• D) Historical

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Definitions:

Predetermined Overhead Rate

This rate is calculated before a period begins and is used to apply overhead costs to products based on a selected activity base.

Job-Order Costing

A cost accounting system used to allocate costs to specific jobs or batches, useful for unique or custom orders.

Machine-Hours

A measure of production time, referring to the total hours a machine is operated within a specific period.

Predetermined Overhead Rate

An estimated charge per unit of activity used to allocate manufacturing overhead costs to products.