Concept explainers
(Learning Objective 1) Which of the following is true?
- a. Ideal standards are based on currently attainable conditions.
- b. Practical standards are based on ideal conditions.
- c. A
standard cost is the budgeted cost for one unit. - d. Standards should never be updated.
To identify: The appropriate answer for the given statement.
Answer to Problem 1QC
Option c. The true statement is a standard cost is the budgeted cost for one unit.
Explanation of Solution
a.
Ideal standards are based on currently attainable conditions is not the correct option because Ideal standards are the standards which are based on ideal conditions.
b.
Practical standards are based on ideal conditions is not the correct option because Practical standards are based on currently attainable conditions.
c.
A standard cost is the budgeted cost for one unit is the correct option because standard cost is the budgeted cost for a unit.
d.
Standards should never be updated is not the correct option because standard once developed needs to be kept updated.
Want to see more full solutions like this?
Chapter 11 Solutions
Managerial Accounting (5th Edition)
- Think of two [ of your ] real life examples about objective principleThink of two [ of your ] real life examples about cost principlearrow_forwardListed below are a number of statements concerning relevant versus irrelevant costs and benefits. Complete each statement by providing the missing term or phrase. (Terms may be used more than once as an answer.) 1. _____ are costs that have already been incurred and are not relevant to future decisions 2.______ is a measure of the limit placed on a specific resource 3. A/an ________ is the foregone benefit of choosing to do one thing instead of another 4. Monthly Utility costs are estimated to be 1,200 regardless of the course action; in this case the utility costs are considered as a/an__________ 5. When a company has not yet reached the limit on its resources it has _________ 6. A/an _________ has the potential to influence a particular decision and will change depending on the alternative a manager selects. 7. at __________ opportunity costs become relevant and sould be incorporated into the analysis. 8. When managers are forced to choose one alternative over another due to…arrow_forward1. What is the definition of cost and explain? thank you! Please include the reference if it's okay...arrow_forward
- To encourage continuous improvement O 1. easily attainable standards should be used O2. ideal standards should be used O 3. companies should never use stretch goals 4. standards should increase in difficulty over timearrow_forwardIn a decision analysis situation, which one of the following costs is generally not relevant to the decision?A. Differential cost.B. Avoidable cost.C. Incremental cost.D. Historical cost.arrow_forwardStandards that can be attained with reasonable effort are called standards. O a. ideal O b. normal O c. theoretical O d. adjustedarrow_forward
- Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making?A. avoidable costsB. unavoidable costsC. sunk costsD. differential costsarrow_forwardWhich type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making? Group of answer choices A. avoidable costs B. unavoidable costs C. sunk costs D. differential costsarrow_forwardWhich of the following best defines the concept of a relevant cost? a. A past cost that is the same among alternatives. b. A past cost that differs among alternatives. c. A future cost that is the same among alternatives. d. A future cost that differs among alternatives. e. A cost that is based on past experience.arrow_forward
- Which of the following costs can be ignored when making a decision?a. Opportunity costs. b. Differential costs. c. Sunk costs. d. Relevant costs.arrow_forwardThe potential benefit of one alternative that is lost by choosing another is known as a. An alternative cost. d. An opportunity cost. b. A sunk cost. e. An out-of-pocket cost. c. A differential cost.arrow_forwardQuestion 27 . Fundamentally, the identification of a performance shortfall becomes an exercise in problem solving. The first step is to identify the cause of the shortfall. Two possible "causes" were suggested, although a combination of both is certainly possible. These two possible causes are mental & physical. can't & won't. intrinsic & extrinsic. O internal & external.arrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning