Which of the Following Is Not a Limitation of Standard

question 104

Multiple Choice

Which of the following is not a limitation of standard costing system?

• A) Standard costing system takes a process perspective rather than a departmental perspective.
• B) Standard costing system becomes outdated easily.
• C) Standard costing systems do not encourage continuous improvement
• D) Standard costing system focuses on the consequences rather than the causes of variances.

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Definitions:

Cost Per Unit

The total expense incurred to produce, store, and sell one unit of a product or service, calculated by dividing total costs by the number of units produced.

Inventory

The complete list of goods or materials a company holds, intending to sell it in the regular course of business.

Conversion Costs

The combined costs of direct labor and manufacturing overheads that are incurred to convert raw materials into finished goods.

Raw And In Process

Materials that are either in their natural state and used in the manufacturing of products or materials that are partially processed but not yet completed.