Standard costs may be used in a job order costing system by

• establishing standards for quantities and/or costs of production inputs.
• providing a basis for managers to evaluate the efficiency of operations through comparisons of actual and standard costs. Differences between actual costs and standard costs are captured in variance accounts, and by analyzing the vari¬ ances, managers gain an understanding of the factors that cause costs to differ from the ex¬ pected amounts.LO.1