Answer
Standard costs serve four main purposes:
1) Evaluating performance by comparing actual costs to predetermined standards
2) Controlling costs by setting expected cost levels
3) Guiding pricing decisions by providing cost benchmarks
4) Valuing inventory consistently for financial reporting.
Work Step by Step
Standard costs serve four main purposes:
1) Evaluating performance by comparing actual costs to predetermined standards
2) Controlling costs by setting expected cost levels
3) Guiding pricing decisions by providing cost benchmarks
4) Valuing inventory consistently for financial reporting.