Standard costs are used to measure:
A) Price and quantity variances.
B) Price variances only.
C) Quantity variances only.
D) Price, quantity, and sales variances.
E) Quantity and sales variances.

Question

Quizplus · Accepted Answer

Standard costs are used to measure both price and quantity variances. Price variances indicate the difference between the actual cost of a material or labor and the standard cost, while quantity variances indicate the difference between the actual quantity used or produced and the standard quantity. Thus, option A best describes the purpose of standard costs.

Standard Costs Are Used to Measure