CAF-5 · Chapter 10 · Question 7 of 10
Which of the following best describes a "Basic Standard" in standard costing?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A standard that is kept unchanged over a long period of time, primarily used to show long-term trends in prices and efficiency.
Explanation
Basic standards are long-term standards that remain unaltered over a period of years. Their primary purpose is to help management track long-term trends in efficiency and price changes over time.
More Standard Costing MCQs
- Q9When setting a standard cost for direct materials, which of the following factors should the purchasing department normally incorporate…
- Q10If a company introduces a new complex product and expects a 90% learning curve to apply to the workforce, how should this effect be…
- Q1How is a "Standard Cost" fundamentally defined in management accounting?
- Q2Which type of performance standard assumes perfect operating conditions with absolutely no allowance for wastage, inefficiencies, or…
- Q3Which type of performance standard is most widely used because it is most likely to motivate employees by setting challenging but…