Usefulness of standard costs in controlling costs
Standard costs are said to be useful in controlling costs. Assume that the standard cost for raw materials per unit of finished product is $6.00 based on 3 kg at $2.00 per kg.
i. Explain how such a standard can be used to evaluate performance.
ii. Why is the degree of controllability important in utilising standard costs to evaluate performance?

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The Answer of Usefulness of standard costs in controlling costs Standard costs are said to be useful in controlling costs. Assume that the standard cost for raw materials per unit of finished product is $6.00 based on 3 kg at $2.00 per kg. i. Explain how such a standard can be used to evaluate performance. ii. Why is the degree of controllability important in utilising standard costs to evaluate performance?

Usefulness of Standard Costs in Controlling Costs