Manufacturing firms set standards for the amount and price of direct materials, direct labor, and overhead consumed by their products. Standards establisha benchmarkto 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.

Standards-variance analysis cost control system can be applied to non-manufacturing businesses, provided that they use repetitive activities to produce a common product or service.

Based on experience, describe and discuss a non-manufacturing (service) business that could benefit from the use of standards. Also explain how standards would help that business control its operations.