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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Students have asked these similar questions

Which of the following statements regarding activity-based costing (ABC) is false? A. ABC is not an appropriate tool for analysing non-manufacturing costs. B. ABC can be used to analyse the profitability of customers. C. ABC evolved as a response to problems with traditional costing systems. D. ABC can be used to measure the cost of cost objects.

Which of the following statements is false? Cost allocations such as activity-based costing allow manager to evaluate profitability of their products. A budget is a quantitative plan for acquiring and using financial and other resources over a specific forthcoming time period. A detailed activity-based costing system is costly to implement. Using different allocation base does not affect manufacturing overhead costs allocated to each product.

The analysis of variance is an essential management accounting approach used to determine the cost of a product and its profitability. Managers use variance analysis to make judgments regarding the expenses of labour and materials that are incurred as a result of the production of a product or the provision of a service. In relation to the above, critically appraise five (5) differences between fixed and variable costs along with examples of each cost. Critically evaluate the purposes and features of marginal costing?

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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