Which of the following statements is not true about the use of a standard cost system?
A) Standards can be used by individuals to judge their own performance.
B) As long as costs do not fall significantly outside of standards managers can usually focus on other issues.
C) The use of standard costs can greatly simplify bookkeeping.
D) A favourable variance will always be good thing for a business.

Question

Quizplus · Accepted Answer

A favourable variance is not always a good thing for a business as it could indicate that actual costs were lower than expected due to lower quality materials or production shortcuts. These could have negative long-term effects on the business.

Which of the Following Statements Is Not True About the Use