1. (a) Define standard costs. (b) Name some advantages of standard cost system.

2. A conference speaker discussing budgets and standard costs made the following statement:

Budgets and standards are not the same thing. They have different purposes and are set up and used in different ways; yet a specific relationship exists between them.

(a) Identify distinctions or differences between budgets and standards. (b) Identify similarities between budgets and standards.

3. The use of standard costs in pricing and budgeting is quite valuable since decisions in the fields of pricing and budgetary planning are made before the costs under consideration are incurred.

4. What type of variances are computed for materials, labour, and factory overhead?