Standard costs are planned costs that a firm should aim to achieve. They include not only direct materials and factory overheads, but also direct labor costs. While the standards may be based on targeted low costs, they reflect the company's objectives and strategies, rather than the lowest possible costs that could be achieved.

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Standard Costs Are

Question 9

Multiple Choice

Standard costs are:

A) Planned costs the firm should attain.
B) Associated with direct materials and factory overhead only.
C) Associated with direct labor and factory overhead only.
D) Targeted low costs the firm should strive for.
E) None of the above.

Correct Answer: