Which of the Following Statements Is True

question 40

Multiple Choice

Which of the following statements is true?

• A) In a standard costing system, standard costs can only be used for cost control.
• B) In a standard costing system, standard costs can only be used for product costing.
• C) In a standard costing system, standard costs are used for both cost control and product costing.
• D) In a normal costing system, standard costs are used for cost control and normal costs are used for product costing.

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Definitions:

Activity Increases

Situations in which the level or intensity of a specific action or operations grows or intensifies.

Discretionary Fixed Costs

Those fixed costs that arise from annual decisions by management to spend on certain fixed cost items, such as advertising and research.

Committed Fixed Costs

Long-term fixed costs that cannot be easily altered in the short term, such as lease payments or insurance contracts.

Volume

The quantity or amount of something, often used in context with production, sales, or trading activities.