Standard costs are:

Question

Standard costs are:

Quizplus · Accepted Answer

Standard costs are planned costs that the firm expects to attain. They are predetermined costs based on previous experience, industry standards, and other relevant factors. These costs can be associated with direct materials, direct labor, and overhead. Standard costs help organizations establish budgets, track performance, and identify areas for improvement. Therefore, option A is the best choice. Option B and C are incorrect because standard costs can apply to all three components of product costs: direct materials, direct labor, and overhead. Option D is incorrect because standard costs are not necessarily targeted low costs. They are simply a planned cost that the company hopes to achieve.

Standard Costs Are