Standard costing and variance analysis
. Standard costing recognizes that goods and services are made up of a fixed set of inputs.

. Standard costs are a vague guess about what a product or service should cost.

. Standard costing represents income, costs and profits that will remain the same for an indefinite period.

. Standard costing represents an efficient, predictive tool that provides a reasonably accurate estimate of what the cost of a product or service should be over a given period of time.