Quiz 10: Standard Costing: a Managerial Control Tool

Business

The difference between standard cost and budget is: • Standard cost reflects the projected figure for a unit i.e. factory overheads materials or Output produced of each unit. • Budget reflects the amount set by an organization to meet the projected expense, revenues, and costs. It shows the available amount to send and spread over all expenses. For Example: Let's say in a manufacturing organization of notebooks of student, the production department set the cost of $2 to be for the paper to be used i.e. standard cost and the organization has set the budget of marketing of those notebooks in the market of $50,000 p.a.

Calculate hospital wide rate: img

Correct option is a Historical experience should be used with caution in setting standards because they may perpetuate operating inefficiencies.