ECONOMICS

Detailed explanation-1: -Standard Quantity   SQ The quantity of material required for manufacturing the product. It may be expressed for one or more units of output. Standard Material required for producing 1 unit is 10 kg. Standard output is 120 units and the material required for the same is 1, 200 kg.

Detailed explanation-2: -When to use Standard Costing in Business Operations. Manufacturing companies are typically the primary users of standard cost accounting. This is because standard costing is well suited for products that are produced in large quantities.

Detailed explanation-3: -To determine these costs, you’ll need to multiply the rate of each by the quantity (in units or hours). For example, if the direct materials price is $10 and the standard quantity is 20 pounds per unit, you would multiply $10 by 20 to get $200. This would be the standard cost for the direct materials only.

Detailed explanation-4: -Standard Costing is an integral part of the costing process within an organisation. It is a process that helps compare the revenues and actual cost of producing a good or service with the actual results to measure the variance and understand its reasons.