Answer question

ANALYSIS AND INTERPRETATION PROBLEMS AIP 11.1 Criticism of Standard Costs LO 1, 2 Critically evaluate the following quotation: The simple standard cost model of materials, labor, and allocated overhead, however, used for nearly a century, is at its heart like the economist's cost curve, based on a single product cost model. The standard cost model, developed 100 years ago, was probably the right engineering design at the time, given the low percentage of overhead, relative to direct labor and materials, the limited diversity in most rms, and the high cost of information collection and processing. By the end of the 20th century, however, this same model represented a bad engineering tradeoff. Information collection and processing costs were much lower (thanks to Moore's Law) and the simple stande cost model no longer represented well contemporary companies' cost structure in the presence of high product variety, process complexity, and customer proliferation