In most companies, machines break down occasionally and employees are often less than perfect. Which type of standard acknowledges these characteristics when determining the standard cost of a product?
A) Efficiency standard
B) Ideal standard
C) Practical standard
D) Budgeted standard

Question

Quizplus · Accepted Answer

The practical standard acknowledges that machines may break down occasionally and employees are likely to make errors. This type of standard is more realistic and achievable compared to an ideal standard, which assumes perfect conditions and performance. An efficiency standard focuses on maximizing output while minimizing resources, while a budgeted standard is based on projected costs and revenues.

In Most Companies, Machines Break Down Occasionally and Employees Are