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Standard costing is most useful for control because standards are set
Aafter the accounts are closed
Bonly when a variance appears
Cat the end of the financial year
Dbefore the work is performed
Answer & Solution
Correct answer: D. before the work is performed
1. A standard is a predetermined cost, worked out in advance of the activity.
2. Because it exists beforehand, actual results can be compared against it as work proceeds.
3. The resulting variances point to what needs attention while there is still time to act.
4. A figure computed only after the year closes explains history but controls nothing.
_Source: ICAI Cost and Management Accounting Ch13 'Standard Costing', section 13.1_
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