Standard costs are used in the calculation of:
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 compare actual costs to expected or budgeted costs. Price and quantity variances are calculated by comparing the actual price and quantity of inputs used to the standard price and quantity allowed for the output produced. Therefore, standard costs are used in the calculation of price and quantity variances.

Standard Costs Are Used in the Calculation Of