1. What are the three primary reasons for using a standard cost system? In a business that routinely manufactures the same products or performs the same services, why are standards helpful?2. What are ideal standards? What are currently attainable standards? Explain which standard is usually adopted and why.3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to support your answer.

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1. What are the three primary reasons of using a standard cost system? In a business that routinely manufactures the same products or performs the same services, why are standards helpful?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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1. What are the three primary reasons for using a standard cost system? In a business that routinely manufactures the same products or performs the same services, why are standards helpful?

2. What are ideal standards? What are currently attainable standards? Explain which standard is usually adopted and why.

3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to support your answer.

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