Concept explainers
(a) “
(a)
Standard costs: These are the costs which a company determines as a standard to attain its objectives. These are the pre-determined costs where an expected cost is substituted for the actual costs, and companies use this for measuring performance.
To Explain: (a) Whether standard costs are the expected total costs of completing a job or not.
Answer to Problem 1Q
No, it is incorrect; the standard costs are predetermined unit cost for completing a job. The standard costs are the estimated costs, which companies use to measure their performance, and the companies try to attain it as a standard objective.
Explanation of Solution
- Standard costs are the costs which are estimated by a company to measure its own financial performance.
- The standard costs are the estimated total costs and these are the standard of the costs which a company tries to achieve in its future accounting period.
No, the standard costs are not the expected total cost of the company.
(b)
Standard costs: These are the costs which a company determines as a standard to attain its objectives. These are the pre-determined costs where an expected cost is substituted for the actual costs, and companies use this for measuring performance.
To Explain: (b) whether standard imposed by the government agency is regulation or not.
Answer to Problem 1Q
Yes, the standards imposed by the governmental agencies are known as regulations. The government regulations are the defined acts and rules which have legal grounds. These acts are the labor standards, equal opportunity, and environmental standards.
Explanation of Solution
- The government regulations refer to some kind of rules which are prepared so that the said work is done in a defined manner, and is abiding by the law.
- The government regulations are also some standards which are set by the government for the said work, and so that are needed to be followed.
- It is prepared by the government to manage the works in a proper manner and in a defined way so that no discrepancies are created.
The standards imposed by the governmental agencies are known as the regulations.
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