Question

A primary purpose of using a standard cost system is

a. to make things easier for managers in the production facility
b. to provide a distinct measure of cost control
c. to minimize the cost per unit of production.
d. b and c are correct

Answer 1

The primary purpose of using a standard cost system is to provide a distinct measure of cost control and minimize the cost per unit of production.

Step-by-step explanation:

A primary purpose of using a standard cost system is to provide a distinct measure of cost control and to minimize the cost per unit of production. A standard cost system establishes predetermined costs for materials, labor, and overhead for each unit of production. By comparing actual costs with standard costs, managers can identify variances and take actions to control costs and improve efficiency.