Question

A standard differs from a budget because a standard

1)is a predetermined cost
2)contributes to management planning and control.
3)is a unit amount.
4)none of these; a standard does not differ from a budget

Answer 1

A standard differs from a budget because it contributes to management planning and control.

Step-by-step explanation:

The correct answer is option 2) contributes to management planning and control. A standard differs from a budget because it is a predetermined cost that serves as a benchmark or goal for measuring performance. It provides a basis for comparing actual performance to the expected or desired performance.

Standards are typically expressed as unit amounts, such as labor hours per unit of output or material costs per unit of production. They help management plan and control operations by setting performance expectations and enabling them to monitor and evaluate performance against those expectations.