Answered

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Which of the following is true of a standard costing system?
a. In a standard costing system, the Work in Process account is maintained exclusively on the basis of standard costs.
b. In a standard costing system, standard costs can only be used with process costing.
c. In a standard costing system, journal entries are made using actual cost data.
d. In a standard costing system, standard costs can only be used with job order costing.

Sagot :

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The correct answer is:

a. In a standard costing system, the Work in Process account is maintained exclusively on the basis of standard costs.

Explanation:

- **Standard Costing System**: This system uses standard costs to value inventory and record cost flows.

- **Work in Process Account**: In this system, it is maintained using standard costs, which helps in variance analysis (comparing standard costs to actual costs to determine variances).

Other options are incorrect because:

- **b and d**: Standard costs can be used with both process costing and job order costing.

- **c**: Journal entries in a standard costing system use standard cost data, not actual cost data.

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