Which of the following could result in a situation where the use of a standard cost system to control labour costs might not be the most useful?
A) There is a desire to simplify the accounting for costs of items manufactured.
B) The integration of costing with responsibility accounting.
C) Manufacturing is highly automated.
D) Standards are viewed by employees as reasonable.

Question

Quizplus · Accepted Answer

When manufacturing is highly automated, the use of a standard cost system to control labor costs might not be the most useful as there is lesser involvement of human labor in the production process, making it difficult for standard costs to reflect the actual labor costs. Instead, a system that accounts for the depreciation and maintenance costs of machinery might be more useful.

Options A, B, and D do not affect the effectiveness of a standard cost system to control labor costs. The desire to simplify accounting for costs of items can be achieved by using a standard cost system, integration of costing with responsibility accounting can complement the use of a standard cost system, and standards being viewed as reasonable can ensure the effectiveness of a standard cost system.

Which of the Following Could Result in a Situation Where