In which of the following situations would the use of a standard cost system to control labour costs not necessarily yield useful results?
A) A business is employing responsibility accounting.
B) The pace of production is constrained by machine processing speeds.
C) The bookkeeping systems charges materials,labour and overhead costs to work-in process inventory using standard costs.
D) In addition to the full monthly standard cost reports the business uses a system where variances are estimated on weekly basis.

Question

Quizplus · Accepted Answer

The use of a standard cost system to control labour costs may not necessarily yield useful results when the pace of production is constrained by machine processing speeds because there may not be much opportunity for labour cost savings in this situation, thus making standard costs irrelevant for labour cost control.

In Which of the Following Situations Would the Use of a Standard