MI – Mar-Jul 2020 – L1 – SA – Q12 – Costing Techniques

Identify the type of standard that assumes imperfect conditions.

Question

The standard set on the assumption of conditions that recognise an element of imperfection is known as:

A. Ideal standard
B. Basic standard
C. Current standard
D. Attainable standard
E. Favourable standard

Answer

D. Attainable standard

Explanation:
The correct answer is option D, “Attainable standard.”
Explanation: Attainable standards consider normal working conditions, including expected inefficiencies, and are more realistic compared to ideal standards, which assume perfect conditions without inefficiencies.

Tags: Cost Control, Costing Techniques, Standard Costing, Variance Analysis
Level: Level 1

Topic: Costing Techniques
Series: MAR/JULY 2020

Uploader: Theophilus