What are the stages involved in setting standard cost for Direct material cost and Direct labour cost ?

What are the stages involved in setting standard cost for following?


i.) Direct material cost: Setting the standard cost for direct material involves two stages-

- Deciding Price Standard

- Deciding Use Standard

ii.) Direct labour cost : Setting the standard cost for direct material involves two stages-

- Deciding of Wage Rate Standard

- Deciding of Labour Efficiency Standard
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What is the importance of reporting variances in standard costing systems?
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The pre-requisites for reporting the variances effectively are as follows:…
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