What is risk of material misstatement?

What is ideal standard?

Ideal standard is one method of setting standard in standard costing so as to be used in variance analysis. It refers to result from perfect performance under perfect conditions. Ideal standards makes no provisions for normal losses, ineffciencies, wastage of labour and material or machine down time as result of this there is always are adverse variances when ideal standards are used.Although it is ideal it is impossible to achieve in practice. The setting of ideal standards is likely to demotivate staff since the standards are not achievable in practice.

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