ECONOMICS

Detailed explanation-1: -Standard quantity per unit of direct materials is the amount of direct materials or raw materials that should be required to complete a single unit of product, including allowances for normal waste, spoilage, rejects, and similar inefficiencies.

Detailed explanation-2: -Setting direct materials standards. The standard price per unit for direct materials should reflect the final, delivered cost of the materials, net of any discounts taken. The standard price is for a particular grade of material, purchased in particular lot sizes, and delivered by a particular type of carrier.

Detailed explanation-3: -Standard price relates to a pre-established price for direct material while direct material quantity relates to the quantity of direct material purchased for production. One of the reasons for calculating a standard price is to use it as a benchmark for comparing actual price.