Costing StandardsGenerally, we describe a standard cost as a predetermined cost, estimated futurecost, an expected cost, a budgeted unit cost, or a “should be cost”.Standard costs are used in a manufacturing, retail or service setting and willconsist if the following:1). Direct materials (quantity and cost per unit),2). Direct labor (quantity and cost per hour) and,3). Manufacturing overhead (POHR for fixed and variable expenses)