Which of the following methods is not employed in the establishment of standard costs?
A) management judgement concerning future operating conditions.
B) analysis of historical performance data.
C) discounted cash flow analysis.
D) time and motion studies.

Question

Quizplus · Accepted Answer

Discounted cash flow analysis is not typically used in the establishment of standard costs. Standard costs are usually based on analysis of historical performance data, management judgement concerning future operating conditions, and time and motion studies. Discounted cash flow analysis is more commonly used in capital budgeting decisions.

Which of the Following Methods Is Not Employed in the Establishment