A budget for a single unit of a product or service is known as the standard cost of the product or service. The standard quantity tells you the budgeted amount of materials, labor, and overhead in a product. The standard price tells you the budgeted price of materials, labor, or overhead for each unit. In this week's discussion, you will be asked to apply these principles.
Please respond to all of the following prompts in the class discussion section of your online course:
Choose a company whose product or service you use. Explain how standard costing applies to that company. Describe how that company would determine standard quantity and standard price.Provide examples of factors which could affect the following variances:
Direct material variance;
Direct labor variance;
Variable overhead variance; and
Fixed overhead variance.