Which Statement Is True Regarding a Standard Cost System

question 83

Multiple Choice

Which statement is true regarding a standard cost system?

• A)Both actual and standard costs are used.
• B)Only standard costs are used.
• C)If variances occur,then something negative in the operations has occurred.
• D)Standards are used only when actual amounts are not available.

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Definitions:

External Benefit

A positive effect on a third party or the society at large, generated by the production or consumption of a good or service.

Externalities

Costs or benefits of a market activity borne by a third party; can be negative (costs) or positive (benefits).

Private Solutions

Solutions derived from individual or corporate initiatives without direct government intervention or subsidies.

Interested Parties

Individuals or groups that have a stake or interest in the outcome of a project, decision, or endeavor.