Standard costing systems budget quantities and costs on a unit basis for all manufacturing costs. A standard cost is a budgeted or expected cost per unit. Standards are set in advance and are developed in a number of ways: historical experience, engineering studies, and based on input from operating personnel who are familiar with the process. Because standard setting can be complex and expensive, once standards are set, they are rarely changed.

There are several types of standards. Select the standard type with its appropriate definition.