Accounting · Cost Accounting
Which of the following statements is INCORRECT regarding standard costing?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1In standard costing, manufacturers compare standard costs to actual costs, and the difference is known as a variance.
- 2A higher amount of actual production costs is inherently desired or planned in a standard cost system.✓
- 3Standard costing allows for effective cost control through variance analysis.
- 4It is a branch of cost accounting used by manufacturers to plan costs for direct materials, direct labour, and overheads.
Correct answer
A higher amount of actual production costs is inherently desired or planned in a standard cost system.
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