1. Statement 1: A budgeted cost for one unit of product may not always be the standard cost of said product. Statement 2: Standard cost maybe described as benchmarks used to evaluate performance. a. both are true b. both are false c. Statement 1 is true d. Statement 2 is true
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
1. Statement 1: A budgeted cost for one unit of product may not always be the
a. both are true
b. both are false
c. Statement 1 is true
d. Statement 2 is true
2. Standard costs differ from budgeted costs in that standard costs are:
a. always expressed in total amounts while budgeted costs are in per unit amounts
b. costs incurred for actual production while budgeted costs are that should have been incurred for production
c. costs that have been incurred for actual production while budgeted costs are costs that should be incurred for planned production
d. based on engineering studies while budgeted costs are based on historical data
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