Which of the Following Are Benefits of Standard Costing

question 56

Multiple Choice

Which of the following are benefits of standard costing?
I. It makes employees more aware of the impact of costs on operations
II. It serves as a target against which to evaluate performance
III. It eliminates the need to compute variances
IV. It is a cheap way of valuing inventory

• A) I, II, III and IV.
• B) I, II and IV only.
• C) II, III and IV only.
• D) I and II only.

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Definitions:

Dominant Firms

Companies that have a major share of the market sales or exert significant influence in their industry.

Contestable Market

A market structure where there are no barriers to entry or exit, and hence, firms face potential competition.

Exceeds Marginal Cost

The condition where the revenue received from the sale of an additional unit of output is greater than the cost required to produce that additional unit.

Contestable Markets

Markets where the threat of potential entry by competitors influences the behavior and pricing of existing firms.