Standards are often used as the basis for many components in the master budget.

Question

Quizplus · Accepted Answer

Standards provide a benchmark or guideline for setting expectations and goals in many components of the master budget, such as sales volumes, production levels, costs and expenses, and profit margins. Using standards helps to improve accuracy and consistency in budgeting and facilitates monitoring of actual results against the budgeted amounts.

Standards Are Often Used as the Basis for Many Components