Question

Standard costs

a. are estimates of costs attainable only under the most ideal conditions
b. are difficult to use with a process costing system
c. can, if properly used, help motivate employees
d. require that significant unfavorable variances be investigated, but do not require that significant favorable variances be investigated

Answer 1

Standard costs are estimates used to evaluate performance in normal operating conditions. They can be applied to both process costing and job costing systems. Unfavorable variances should be investigated, but favorable variances may not require investigation.

Step-by-step explanation:

Standard costs are estimates of costs attainable under normal operating conditions. They provide a benchmark for comparison against actual costs.

While they may not represent ideal conditions, they serve as a useful tool for evaluating performance and identifying areas for improvement.

Standard costs can be used with both process costing and job costing systems. They help provide a structured framework for cost control and variance analysis.

When significant unfavorable variances occur, it is important to investigate the causes and take corrective actions.

However, significant favorable variances may not require investigation as they could be due to favorable circumstances or improvements in efficiency.