Standard costs are divided into which of the following components?
A) Variance Standard and Quantity Standard
B) Materials Standard and Labor Standard
C) Quality Standard and Quantity Standard
D) Price Standard and Quantity Standard

Question

Quizplus · Accepted Answer

Standard costs are typically divided into two components: a Price Standard and a Quantity Standard. The Price Standard represents the estimated cost per unit of a particular input, such as materials or labor, while the Quantity Standard represents the estimated amount of that input that should be used per unit of output. By tracking variances between actual and standard costs, managers can identify areas where they need to take action to improve efficiency or reduce costs.

Standard Costs Are Divided into Which of the Following Components