ECONOMICS

Detailed explanation-1: -Currently attainable standards can be achieved under efficient operating conditions. Ideal standards demand maximum efficiency and can be achieved only if everything operates perfectly. Standard costs are developed for direct materials, direct labor, and variable overhead only.

Detailed explanation-2: -(iii) Attainable standards represent what could be achieved with a reasonable level of effort under normal operating conditions. They include an allowance for normal losses, machine breakdowns, maintenance and idle time.

Detailed explanation-3: -Definition (1): Ideal standards represent optimum levels of performance under perfect operating conditions. Normal standards represent efficient levels of performance that are attainable under expected operating conditions.

Detailed explanation-4: -Attainable standards / Expected standards It means that attainable standards are representative of the potential that business is capable to achieve. For example a machinery is expected to run for 4, 000 hours where it can run for 5, 000. Thus current standard is 4, 000 hours where attainable is 5, 000 hours.