Manufacturing firms set standards for the amount and price of direct materials, direct labor, and factory overhead consumed by their products. Standards establish a benchmark to be used in evaluating actual performance. They allow management to recognize when costs are not in line with the company's projections and to take corrective action.

Starbucks and other companies have been in the headlines recently for tying executive compensation to their diversity and community impact goals.

For your discussion post:

(1) Describe a couple of examples of standards in your daily life. For example, following the Student Code of Conduct requires you to follow rules.

(2) If you are a member of the Board of Directors for a publicly-traded company, what position would you take - would you tie company performance, to CEO pay or would you establish different standards for the CEO?