CA Intermediate · Cost and Management Accounting · Standard Costing
In standard costing, a standard that is set on the assumption of ideal operating conditions, with no allowance for normal wastage, machine breakdowns or idle time, is called:
Such a standard is called an ideal standard. It assumes perfect operating conditions with no wastage, breakdowns or idle time, so it is rarely attainable. Normal, current and basic standards each allow for realistic conditions or remain fixed over time.
- AIdeal standardCorrect
- BNormal standard
- CCurrent standard
- DBasic standard
Explanation
An ideal standard assumes the best possible efficiency and no losses of any kind. Normal standards allow for expected losses, current standards reflect present conditions, and basic standards remain unchanged over long periods as a base for comparison.
Did you get it right without looking?
One question tells you little. A timed set on Standard Costing shows your real accuracy, how long you take and where you lose marks.
More Standard Costing questions
- Kaveri Textiles has a standard of 5 hours per unit at Rs 40 per hour. In a month it produced 800 units. Hours paid were 4,300 and hours actu…
- Standard Costing: Rajlaxmi Textiles has a standard of 4 kg of yarn per unit at Rs 50 per kg. In March it produced 2,500 units and used 10,40…
- Which statement about a favourable material price variance combined with an adverse material usage variance is most consistent with standard…
- Sundaram Textiles budgets production of 2,000 metres of cloth at a standard of 2.5 kg of yarn per metre at Rs 120 per kg. Actual output was …
- Mehta Chemicals Ltd uses a standard mix of Material A 60% at Rs 40/kg and Material B 40% at Rs 60/kg. Actual input was 1,000 kg: A 500 kg an…
- Sharma Textiles fixes a standard of 4 metres of cloth per shirt at Rs 150 per metre. In March it produced 2,000 shirts, using 8,400 metres o…