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CAF-5 · Chapter 10 · Question 2 of 10

Which type of performance standard assumes perfect operating conditions with absolutely no allowance for wastage, inefficiencies, or machine breakdowns?

Test yourself: pick an answer

Reveal answer & explanation

Correct answer: D) Ideal standard

Explanation

Ideal standards assume perfect working conditions, meaning no allowances are made for normal waste, spoilage, machine breakdowns, or idle time. They are rarely used in practice because they are practically unattainable.

All 10 questions in Chapter 10Standard Costing MCQs with answers

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