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• B) Standard costing system becomes outdated easily.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:

Construction Costs

Expenses incurred in the building of structures, infrastructure, or other forms of real estate projects.

Corporate Bond

A financial security issued by a corporation to raise capital, with the promise to repay the principal along with a specified interest rate to the bondholders.

Interest Rate

The percentage of a loan amount charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.

Arbitrage

The simultaneous purchase and sale of the same assets or commodities in different markets to profit from unequal prices.