ECONOMICS

Detailed explanation-1: -Standard costs are divided into variance standard and quantity standard. Further, standard cost checks the variance between actual and standard performance. So the correct answer is A. Variance standard and quantity standard.

Detailed explanation-2: -Standard costs are estimates of the actual costs in a company’s production process, because actual costs cannot be known in advance. This helps a business to plan a budget.

Detailed explanation-3: -There are two main variances in standard costing: the material cost variance and the labor cost variance. Material cost variance: The material cost variance is the difference between the actual cost of raw materials used and the standard cost of raw materials budgeted for a specific product.

Detailed explanation-4: -Standard cost is used to identify the variances between the actual cost incurred and the cost that should have occurred to produce the goods in normal conditions. Standard cost is a predetermined cost.

Detailed explanation-5: -Quantity and price standard: A quantity standard implies the number of materials that should be used to produce a single unit. Price standard is the price that should pay for materials at a given activity level.