Which of the Following Statements Regarding Standard Costing Is/are True

question 100

Multiple Choice

Which of the following statements regarding standard costing is/are true?

• A) Standard costing is useful in diagnosing organisational performance.
• B) Standard costing is useful in performance appraisal.
• C) Standard costing is useful in determining employee pay bonuses.
• D) All of the given answers.

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Definitions:

Total Cost Function

The total cost function is a mathematical representation that shows how total costs of production vary with changes in output level.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Marginal Costs

The increase in cost due to the production of one further unit of a product or service.

Total Cost Function

An equation that shows the overall cost incurred by a firm in the production process, including both fixed and variable costs, as a function of the quantity of output produced.