What standard(s)do(es)direct materials and direct labor have when calculating standard costs?

Question

Quizplus · Accepted Answer

Direct materials and direct labor both have quantity/efficiency standards and price standards when calculating standard costs. The quantity/efficiency standard determines how much of the direct materials or labor is expected to be used in production, while the price standard determines the cost per unit of direct materials or labor. By using both of these standards, companies can accurately calculate their standard costs and compare actual costs to them in order to identify areas where they may need to improve efficiency or reduce costs.

What Standard(s)do(es)direct Materials and Direct Labor Have When Calculating Standard