Which of the following is true of standard costing?
A)It uses estimates that are based only on past costs.
B)It is the same as normal costing.
C)It cannot be used to manage cost centers.
D)It can be used in any type of business.

Question

Quizplus · Accepted Answer

Standard costing can be used in any type of business as it involves setting predetermined costs based on the expected level of performance or production. It is a widely accepted and commonly used costing method in various industries. Option A is incorrect as standard costing is based on expected costs and not just past costs. Option B is incorrect as normal costing is a costing method that utilizes actual costs incurred in the production process. Option C is incorrect as standard costing can be used to manage cost centers by comparing actual costs to predetermined costs.

Which of the Following Is True of Standard Costing