alleryStart learning →A standard cost is described as being developed in order to:
AValue closing inventory
BCompute the tax due
CCommunicate expectations
DRecord past spending
Answer & Solution
Correct answer: C. Communicate expectations
1. The purpose of a standard is forward-looking.
2. A syllabus is one way an instructor can communicate expectations to students.
3. A standard cost is presented through that same analogy.
4. It sets out what performance is anticipated or estimated.
5. Variances then measure how far actual performance departs from it.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 8 'Standard Costs and Variances'_
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