Question

One of the objectives of standard costing is to _______________.

• A. Control and reduce costs
• B. Simplify productions operations
• C. Promote and measure performance
• D. Set cost of manufacture

Answer 1

Answer: (A)

Control and reduce costs

Objectives of using Standard Costing System. To control costs mainly by setting standards for each type of cost incurred – material, labour and overhead. It also helps in analyzing variances and hence judging the effectiveness of managers in controlling the costs for which they are held responsible.