Which of the following best describes the function of standard costing?

The function of standard costing is best described by the option that states it allows for control and performance evaluation through expected costs. Standard costing involves setting predetermined costs for products or services, which serve as benchmarks. These standards are based on efficient operations and expected conditions. By comparing actual costs with standard costs, management can identify variances that signify areas where performance may be lacking or where operations are exceeding expectations.

This system supports management in controlling costs, improving operational efficiency, and evaluating the performance of different departments or units within an organization. When variances are analyzed, managers can take corrective actions if actual costs are significantly higher than the standards, thus improving the organization's financial health.

In contrast, while financial forecasting, tax compliance, and direct costing methods are relevant topics in accounting, they do not capture the primary purpose of standard costing, which is to provide a framework for systematically evaluating the performance and efficiency of operations through the comparison of actual and expected costs.