Standards are designed to evaluate price and quantity variances separately.

Price Variances

Differences between the actual cost of a product or service and its expected cost, often analyzed in budgeting and cost management.

Quantity Variances

Differences between actual quantities of inputs used in production and the standard quantities expected to be used.

Standards

Established benchmarks or norms for measuring quality, performance, or compliance within an industry or organization.

Identify the roles of standards in evaluating price and quantity variances for both direct materials and direct labor.

Verified Answer

Final Answer :

True

Explanation :

Standards are designed to set benchmarks for both price and quantity, allowing for separate evaluation of variances in each area.

Learning Objectives

Identify the roles of standards in evaluating price and quantity variances for both direct materials and direct labor.