A purpose of standard costing is to
A)control costs.
B)allocate costs more accurately.
C)replace subjective decision making.
D)compute the breakeven point.

Question

Quizplus · Accepted Answer

The main purpose of standard costing is to control costs by comparing actual costs with predetermined standards and identifying and analyzing variances. Standard costing helps in identifying areas where the costs are higher than expected and to take corrective actions to reduce such costs in future. Standard costing does not generally involve allocation of costs, replacing subjective decision making, or computing the breakeven point.

A Purpose of Standard Costing Is to