Standard cost is the:
APlanned unit cost
BActual unit cost
CAverage cost
DReplacement cost
Answer & Solution
Correct answer: A. Planned unit cost
1. CIMA defines standard cost as the planned unit cost of a product or service.
2. It is set in advance using engineering studies, historical data, and expected conditions.
3. Actual cost is what is incurred; standard cost is what was planned.
4. Hence standard cost is the planned unit cost.
_Source: ICAI BoS Inter Paper 3, Ch 13 "Standard Costing", §13.1.1 ¶1_
Related questions
Standard costing is most useful for control because standards are setLabour efficiency variance measures the effect of a difference inWhen material purchased is not stated in a question, actual quantity for the price variancStandard quantity 500 kg at 20 per kg, actual 520 kg at 20 per kg. The material usage variAn adverse material price variance is generally the responsibility of theMaterial cost variance can be split intoMaterial price variance is measured asMaterial cost variance is