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134 Which one of the following is the least likely reason why standard costs might not easily be applied to road haulage and distribution services.
A It is difficult to measure labour times reliably
B Variable costs are negligible
C It is difficult to identify a standard item for costing
D Standard costing applies to manufacturing industries only
Hi sir I have a question I think B is the most likely reason why standard cost not easily be appliedI am puzzled why you are asking this, because the question is from the BPP Revision Kit and the Kit has the answer in it, together with a full explanation of why C is the correct answer!!
The answer is C – it is difficult to establish a standard item for costing.
(Why should the fact that variable costs are negligible be an answer? There are plenty of variable costs in road haulage and distribution – for example, the bigger the distance then the more fuel will be used!)
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