Accounting

Standards also are widely used in managerial accounting where they relate to the quantity and acquisition price of inputs used in manufacturing goods or providing services. Quantity standards specify how much of an input should be used to make a product or provide a service. Price standards specify how much should be paid for each unit of the input. If either the quantity or acquisition price of an input departs significantly from the standard, managers investigate the discrepancy to find the cause of the problem and eliminate it.