Standard costs are preset costs for delivering a product or service under normal conditions.

Question

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Standard costs are predetermined costs for producing a product or service under normal operating conditions. These costs are based on historical data, budgets, and other relevant information. Standard costs serve as a benchmark for comparison with actual costs, and any deviation from the standard costs may indicate areas for improvement in the production process or the need for corrective action.

Standard Costs Are Preset Costs for Delivering a Product or Service