Setting Standard Costs – Ideal and Practical Standards: Learning Objective of the Article: Who provide the inputs in setting standard costs? Define and explain ideal and practical standards. What is the difference between budgets and standards? What is the purpose of standard costing? Setting
Ideal and Practical Standards
Ideal standards are those that can be attained only under the best circumstances.Practical standards are those standards that are tight but attainable. They allow for normal machine downtime and employee rest period.