- February 26, 2021 at 7:50 am #6117517fsaMember
- Topics: 57
- Replies: 40
How are you?
I hope you are doing well,
The following question is mentioned in Kaplan Exam Kit #171
Which of the following best defines standard costing in a system of budgeting?
A- all activities are examined without reference to history each year.
B- output level and costs are predetermined, actual results then compared with these predetermined costs and variance analysed.
C- actual costs are compared with predetermined costs for the level of activity.
D- costs are assigned to a manager in order that controllable and non-controllable costs are accounted for.
The answer according to Kaplan kit is C but in my opinion why not B in other words i feel that the answer should be B and C since its mentioned the definition of Standard costing in your note is a system of accounting based on predetermined costs and revenue per unit which are used as a benchmark to assess actual performance and therefore provide useful feedback information to management.
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