All of the following are advantages of standard costs except they
A) facilitate management planning.
B) are useful in setting selling prices.
C) simplify costing in inventories.
D) increase net income.

Question

Quizplus · Accepted Answer

Standard costs provide a benchmark for measuring actual costs and identifying variances, which can help management control costs and improve performance. However, they do not directly impact net income. In fact, if actual costs are higher than standard costs, a company may report lower net income due to unfavorable variances. Therefore, increasing net income is not an advantage of standard costs.

All of the Following Are Advantages of Standard Costs Except