Mury, Inc. produced 1,000 units of the companys product in 2024. The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.35 per yard. The accounting records showed the 2,500 yards of cloth were used and the company paid $1.40 per yard. Standard time was two direct labor hours per unit at a standard rate of $12.00 per direct labor hour. Employees worked 1,700 hours and were paid $10.50 per hour.

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 Set sales prices of products and services Decrease accounting costs Create new products Decrease accounting costs Develop more efficient production methods Identify performance standards Increase production levels Increase sales volume Prepare the master budget Set sales prices of products and services Set target levels of performance for flexible budgets example ueu more