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The most appropriate standard as to set a challenging and achievable targets is? a) ideal std. b) attainable std. c) basic std. d) current std.

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Question added by Fawzy Ahmed Salim El-Shabiby , Accountant , Servtel Information, Security, and Telecommunication Network Limited
Date Posted: 2014/12/03
Lesley Lanag CMA CPA
by Lesley Lanag CMA CPA , Senior Accountant , Takaful Emarat Insurance (P.S.C)

Theoretical or ideal is the absolute level of capacity without considering normal interruptions in production

Currently attainable standard is less than the ideal standard but is still greater than the normal standard which accounts also the decrease in sales demand. I haven't encountered basic standard so far.  And current standard,  I assume, you were pertaining to the Master budget standard or the expected actual utilization standard. This is the output actually expected in the next period based on expected demand.

 

The best answer, in my opinion is D current standard, since normal utilization capacity which is attainable in the long run, is not among the choices. The disadvantage with expected actual utilization standard is that it fluctuates every budget period.

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