All of the Following Are Features of a Standard Cost

question 62

Multiple Choice

All of the following are features of a standard cost system except:

• A)Standards change as conditions change.
• B)Variances may be determined more often than monthly to allow for more timely action.
• C)Standards are based on estimates.
• D)The company determines the actual cost of manufacturing a unit.

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Definitions:

Quantity

The amount or number of a material or immaterial good or service.

Average Fixed Cost

The fixed costs of production (expenses that do not change with the level of output) divided by the quantity of output produced.

Output

The total quantity of goods and services produced by an economy or a firm.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced, a measure of per unit cost.