49.Using standard costs
a.can make management planning more difficult.
b.promotes greater economy.
c.does not help in setting prices.
d.weakens management control.
50.If standard costs are incorporated into the accounting system,
a.it may simplify the costing of inventories and reduce clerical costs.
b.it can eliminate the need for the budgeting process.
c.the accounting system will produce information which is less relevant than the historical cost accounting system.
d.approval of the shareholders is required.
51.Standard costs
a.may show past cost experience.
b.help establish expected future costs.
c.are the budgeted cost per unit in the present.
d.all of these.
52.Which of the following statements about standard costs is false?
a.Properly set standards should promote efficiency.
b.Standard costs facilitate management planning.
c.Standards should not be used in “management by exception.”
d.Standard costs can simplify the costing of inventories.
53.Which of the following is not considered an advantage of using standard costs?
a.Standard costs can reduce clerical costs.
b.Standard costs can be useful in setting prices for finished goods.
c.Standard costs can be used as a means of finding fault with performance.
d.Standard costs can make employees “cost-conscious.”
54.If a company is concerned with the potential negative effects of establishing standards, it should
a.set loose standards that are easy to fulfill.
b.offer wage incentives to those meeting standards.
c.not employ any standards.
d.set tight standards in order to motivate people.
55.A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)
a.ideal standard.
b.loose standard.
c.tight standard.
d.normal standard.
56.Ideal standards
a.are rigorous but attainable.
b.are the standards generally used in a master budget.
c.reflect optimal performance under perfect operating conditions.
d.will always motivate employees to achieve the maximum output.
57.The final decision as to what standard costs should be is the responsibility of
a.the quality control engineer.
b.the managerial accountants.
c.the purchasing agent.
d.management.
58.The labor time requirements for standards may be determined by the
a.sales manager.
b.product manager.
c.industrial engineers.
d.payroll department manager.