Which of the following conditions normally would NOT indicate that standard costs should be revised?
A)The engineering department has revised product specifications in responding to customer suggestions.
B)The company has signed a new union contract that increases the factory wages on average by $2.00 an hour.
C)Actual costs differed from standard costs for the preceding week.
D)The world price of raw materials increased.

Question

Quizplus · Accepted Answer

Actual costs differing from standard costs for the preceding week may indicate a need to revise standard costs to better reflect current costs. However, the other conditions could potentially impact the accuracy of standard costs and indicate a need for revision. For example, revised product specifications or price changes for raw materials could affect the expected cost of production and therefore require an adjustment to standard costs. Similarly, a wage increase could impact the cost of labor and require a revision to the labor standard.

Which of the Following Conditions Normally Would NOT Indicate That