Why does a company use a standard costing system? A. to identify variances from actual cost that assist them in maintaining profits B. to identify nonperformers in the workplace C. to identify what vendors are unreliable D. to identify defective materials

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Answer 1

Textbook Question

Chapter 8, Problem 1MC

Why does a company use a standard costing system?

A. to identify variances from actual cost that assist them in maintaining profits

B. to identify nonperformers in the workplace

C. to identify what vendors are unreliable

D. to identify defective materials

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Expert Solution & Answer

To determine

Concept introduction:

Standard Costing System:

Standard Costing system allows estimating the costs, preparing budgets for future periods, and analyzing the performance by comparing the budgets with actual results and find variances.

To choose:

The reason of using standard costing system.

Answer to Problem 1MC

A. to identify variances from actual cost that assist them in maintaining profits

Explanation of Solution

Explanation for correct answer:

Standard costing system is used by company to identify variances from actual cost that assist them in maintaining profits. Hence option A is correct.

Explanation for incorrect answers:

B. Standard costing does not identify non performers are workplace. Hence this option is incorrect.

C. Standard costing does not identify unreliable vendors. Hence this option is incorrect.

D. Standard costing does not identify defective material. Hence this option is incorrect.

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Belle Garments manufactures customized T-shirts for football teams. The business uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The business operates at a profit margin of 33⅓% on sales. Belle Garments expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2025. At the end of December 2024, Belle Line Garments reported work in process inventory of $93,980 - Job FBT 101 - $51,000 & Job FBT 102 - $42,980 The following events occurred during January 2025. i) ii) Purchased materials on account, $388,000. The purchase attracted freight charges of $4,000 Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing. Job # Direct Materials Direct Labour 101 70,220 61,200 102 97,500 115,600 103 105,300 78,200 104 117,000 85,000 iv) Issued indirect materials…

Answer 2

Textbook Question

Chapter 8, Problem 1MC

Why does a company use a standard costing system?

A. to identify variances from actual cost that assist them in maintaining profits

B. to identify nonperformers in the workplace

C. to identify what vendors are unreliable

D. to identify defective materials

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Expert Solution & Answer

To determine

Concept introduction:

Standard Costing System:

Standard Costing system allows estimating the costs, preparing budgets for future periods, and analyzing the performance by comparing the budgets with actual results and find variances.

To choose:

The reason of using standard costing system.

Answer to Problem 1MC

A. to identify variances from actual cost that assist them in maintaining profits

Explanation of Solution

Explanation for correct answer:

Standard costing system is used by company to identify variances from actual cost that assist them in maintaining profits. Hence option A is correct.

Explanation for incorrect answers:

B. Standard costing does not identify non performers are workplace. Hence this option is incorrect.

C. Standard costing does not identify unreliable vendors. Hence this option is incorrect.

D. Standard costing does not identify defective material. Hence this option is incorrect.

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Answer 3

Textbook Question

Chapter 8, Problem 1MC

Why does a company use a standard costing system?

A. to identify variances from actual cost that assist them in maintaining profits

B. to identify nonperformers in the workplace

C. to identify what vendors are unreliable

D. to identify defective materials

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Expert Solution & Answer

To determine

Concept introduction:

Standard Costing System:

Standard Costing system allows estimating the costs, preparing budgets for future periods, and analyzing the performance by comparing the budgets with actual results and find variances.

To choose:

The reason of using standard costing system.

Answer to Problem 1MC

A. to identify variances from actual cost that assist them in maintaining profits

Explanation of Solution

Explanation for correct answer:

Standard costing system is used by company to identify variances from actual cost that assist them in maintaining profits. Hence option A is correct.

Explanation for incorrect answers:

B. Standard costing does not identify non performers are workplace. Hence this option is incorrect.

C. Standard costing does not identify unreliable vendors. Hence this option is incorrect.

D. Standard costing does not identify defective material. Hence this option is incorrect.

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Answer 4

Textbook Question

Chapter 8, Problem 1MC

Why does a company use a standard costing system?

A. to identify variances from actual cost that assist them in maintaining profits

B. to identify nonperformers in the workplace

C. to identify what vendors are unreliable

D. to identify defective materials

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Expert Solution & Answer

To determine

Concept introduction:

Standard Costing System:

Standard Costing system allows estimating the costs, preparing budgets for future periods, and analyzing the performance by comparing the budgets with actual results and find variances.

To choose:

The reason of using standard costing system.

Answer to Problem 1MC

A. to identify variances from actual cost that assist them in maintaining profits

Explanation of Solution

Explanation for correct answer:

Standard costing system is used by company to identify variances from actual cost that assist them in maintaining profits. Hence option A is correct.

Explanation for incorrect answers:

B. Standard costing does not identify non performers are workplace. Hence this option is incorrect.

C. Standard costing does not identify unreliable vendors. Hence this option is incorrect.

D. Standard costing does not identify defective material. Hence this option is incorrect.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Concept introduction:

Standard Costing System:

Standard Costing system allows estimating the costs, preparing budgets for future periods, and analyzing the performance by comparing the budgets with actual results and find variances.

To choose:

The reason of using standard costing system.

Answer to Problem 1MC

A. to identify variances from actual cost that assist them in maintaining profits

Explanation of Solution

Explanation for correct answer:

Standard costing system is used by company to identify variances from actual cost that assist them in maintaining profits. Hence option A is correct.

Explanation for incorrect answers:

B. Standard costing does not identify non performers are workplace. Hence this option is incorrect.

C. Standard costing does not identify unreliable vendors. Hence this option is incorrect.

D. Standard costing does not identify defective material. Hence this option is incorrect.

Answer 8

Expert Solution & Answer

To determine

Concept introduction:

Standard Costing System:

Standard Costing system allows estimating the costs, preparing budgets for future periods, and analyzing the performance by comparing the budgets with actual results and find variances.

To choose:

The reason of using standard costing system.

Answer to Problem 1MC

A. to identify variances from actual cost that assist them in maintaining profits

Explanation of Solution

Explanation for correct answer:

Standard costing system is used by company to identify variances from actual cost that assist them in maintaining profits. Hence option A is correct.

Explanation for incorrect answers:

B. Standard costing does not identify non performers are workplace. Hence this option is incorrect.

C. Standard costing does not identify unreliable vendors. Hence this option is incorrect.

D. Standard costing does not identify defective material. Hence this option is incorrect.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Concept introduction:

Standard Costing System:

Standard Costing system allows estimating the costs, preparing budgets for future periods, and analyzing the performance by comparing the budgets with actual results and find variances.

To choose:

The reason of using standard costing system.

Answer 12

Answer to Problem 1MC

A. to identify variances from actual cost that assist them in maintaining profits

Answer 13

Explanation of Solution

Explanation for correct answer:

Standard costing system is used by company to identify variances from actual cost that assist them in maintaining profits. Hence option A is correct.

Explanation for incorrect answers:

B. Standard costing does not identify non performers are workplace. Hence this option is incorrect.

C. Standard costing does not identify unreliable vendors. Hence this option is incorrect.

D. Standard costing does not identify defective material. Hence this option is incorrect.

Answer 14

Ch. 8 - Why does a company use a standard costing system?...Ch. 8 - This standard is set at a level that may be...Ch. 8 - This standard is set at a level that could be...Ch. 8 - This variance is the difference involving spending...Ch. 8 - This variance is the difference involving spending...Ch. 8 - What are some possible reasons for a material...Ch. 8 - When is the material price variance unfavorable?...Ch. 8 - When is the material price variance favorable? A....Ch. 8 - What are some reasons for a material quantity...Ch. 8 - When is the material quantity variance favorable?...

Why does a company use a standard costing system? A. to identify variances from actual cost that assist them in maintaining profits B. to identify nonperformers in the workplace C. to identify what vendors are unreliable D. to identify defective materials

Answer to Problem 1MC

Explanation of Solution

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