Employees worked 1,300 hours and were paid $11.00 per hour. Read the requirements. Requirement 1. What are the benefits of setting cost standards? Standard costing helps managers do the following: Prepare the master budget Set target levels of performance for flexible budgets Identify performance standards Set sales prices of products and services Decrease accounting costs Requirement 2. Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances. (Abbreviations used: AC= actual cost; AQ= actual quantity; FOH= fixed overhead; SC= standard cost; SQ=standard quantity.)