Which one of the following statements is correct? Standard costing is a system that can be usefully applied in business environments where:
A)products are custom-built to comply with customer requirements
B)costs are expected to fluctuate within wide parameters
C)the relevant accounting standard on product costing is followed
D)a repetitive and predictable series of standardized operations are carried out

Question

Quizplus · Accepted Answer

Standard costing is most useful when a repetitive and predictable series of standardized operations are carried out, allowing for accurate and consistent measurement of costs. In environments where products are custom-built, costs may vary widely based on customer requirements, making standard costing less useful for cost control and decision-making. Similarly, if costs are expected to fluctuate within wide parameters, standard costing may not provide the necessary level of accuracy in cost measurement. While following relevant accounting standards on product costing is important, it is not the primary factor that determines the usefulness of standard costing.

Which One of the Following Statements Is Correct? Standard Costing