Service organizations do not develop standards for any service costs. overhead.

Question

Service organizations do not develop standards for any service costs. overhead. direct materials. labor. A standard cost accounting system can be used for direct materials. overhead. direct labor. all of these. A purpose of standard costing is to control costs. allocate costs more accurately. replace subjective decision making. computer the breakeven point. One drawback of using standard costing is that it is expensive to use. difficult to implement. often inaccurate. not applicable to most manufacturing systems. A(n)_cost is synonymous with the product cost calculated in a conventional standard cost accounting system.

Explanation / Answer

17. d. All of the above

Standard costs will be established for the following year's direct materials, direct labor, and manufacturing overhead.

Under standard costing system, a comparison between manufacturing cost (Material, labour and variable overhead) is done to evaluate variance betwwen predetermined standard cost and actual cost.

19. a. Expensive to use.

Standard costing system may be tedious, expensive and time consuming to install and keep up to date.

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