If standard costs are incorporated into the accounting system
A) it may simplify the costing of inventories and reduce clerical costs.
B) it can eliminate the need for the budgeting process.
C) the accounting system will produce information which is less relevant than the historical cost accounting system.
D) approval of the shareholders is required.

Question

Quizplus · Accepted Answer

Incorporating standard costs can simplify the costing of inventories and reduce clerical costs by providing a predetermined cost for materials, labor, and overhead. This can help streamline the accounting process and make it easier to calculate the cost of goods sold and ending inventory. Approval of shareholders is not required for this accounting practice, and it does not necessarily produce information that is less relevant than historical cost accounting. However, it is important to make sure that the standard costs used are kept up to date and reflect actual costs as closely as possible.

If Standard Costs Are Incorporated into the Accounting System