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CMA Intermediate · Cost Accounting · Standard Costing and Variance Analysis

In standard costing, a standard that is set on the assumption of efficient operations with allowance for normal wastage, normal machine breakdowns and unavoidable idle time, and which is attainable with reasonable effort, is called:

The standard described is the current or attainable standard. It assumes efficient working but allows for normal wastage, breakdowns and idle time, so it can be reached with reasonable effort, unlike an ideal standard that assumes perfect conditions.

  1. AIdeal standard
  2. BCurrent (attainable) standardCorrect
  3. CBasic standard
  4. DNormal standard fixed for many years

Explanation

An attainable standard allows for normal losses such as wastage, breakdowns and idle time and can be achieved with reasonable effort. An ideal standard assumes perfect conditions with no losses, so it is not the one described. A basic standard is left unchanged over long periods as a base for comparison.

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