CA Inter P4 · Chapter 12 · Question 9 of 10
A standard that assumes perfect operating conditions, with no allowance for wastage, machine breakdowns or idle time, is called a(n):
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Ideal standard
Explanation
An ideal standard can be achieved only under the most favourable conditions, with no allowance for normal losses or inefficiencies. It may demotivate staff because it is rarely achieved. A normal or expected standard includes allowances for normal losses, while a basic standard is kept unchanged over long periods to show trends.
More Standard Costing MCQs
- Q1Standard material for one unit of product is 4 kg at ₹25 per kg. Actual output was 2,000 units, using 8,300 kg purchased and consumed at…
- Q2Using the same data (standard 4 kg at ₹25 per unit; actual output 2,000 units; actual usage 8,300 kg at ₹24), the material usage variance…
- Q3With the same data, the material cost variance is:
- Q4Standard labour per unit is 3 hours at ₹60 per hour. Actual output was 1,800 units. Workers were paid for 5,700 hours at ₹62 per hour…
- Q5Using the same data (standard 3 hours at ₹60 per unit; output 1,800 units; 5,700 hours paid of which 120 hours were abnormal idle time)…