1. A standard cost:

is the "true" cost of a unit of production.

is a budget for the production of one unit of a product or service.

can be useful in calculating equivalent units.

is normally the average cost within an industry.

is almost always the actual cost from previous years.

2. When considering whether to investigate a variance, managers should consider all of the following except the variance's:

size.

pattern of recurrence.

trends over time.

nature, namely, whether it is favorable or unfavorable.

controllability.