Q116
The process of setting standards and comparing actual performance with standards with a view to control the cost is ________.
A.
cost reduction
B.
cost control
AnswerC.
cost allocation
D.
cost ascertainment
Answer: Option B
Solution
Answer: Option B
Solution:
The process of setting standards and comparing actual performance with standards with a view to control the cost is cost control. Cost control is the practice of identifying and reducing business expenses to increase profits, and it starts with the budgeting process. A business owner compares actual results with the budgeted expectations and if actual costs are higher than planned, management takes action.