Once standard costs for direct materials, direct labor, and variable and fixed overhead have been developed, a total standard unit cost can be determined at any time.

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Once standard costs have been developed, a total standard unit cost can be calculated by summing the standard costs of direct materials, direct labor, and variable and fixed overhead. This allows a company to better understand and manage its costs, as well as calculate variances between actual and standard costs.

Once Standard Costs for Direct Materials, Direct Labor, and Variable