Which of the following statements concerning practical standards is NOT correct?
A) Practical standards can be used for product costing and cash budgeting.
B) Practical standards can be attained by the average worker.
C) When practical standards are used; there is no reason to adjust standards if an old machine is replaced by a newer, faster machine.
D) Under practical standards, large variances are less likely than under ideal standards.

Question

Quizplus · Accepted Answer

This statement is not correct. Practical standards may need to be adjusted if an old machine is replaced by a newer, faster machine in order to reflect the increased productivity and efficiency of the newer machine. Therefore, practical standards are not entirely static and may need to be adjusted over time.

Which of the Following Statements Concerning Practical Standards Is NOT