Types of Standards
Ideal standard
Ideal Standard is a standard, which:can be attained under the most favourable conditions. No provision is made e.g. for shrinkage. spoildqe or matching breakdowns. Users of this type of standard believes that the resulting unfavourable
variance will remind management of the need tor improvement in all phases of’operations. Ideal standard are rot widely used in practice because they may influence employee motivation adversely.
Normal Standard:
These standards are based on past average, adjusted with anticipated future changes. We can say these are the standard that may be achieved under normal operating condiiions. These siandard are however difficult to set because they require a degree ol forecasting. The variances thrown out under this system are deviation from normal efficiency, normal sales volume or normal productive volume. If the actual performance is found to be abnormal. large variance” may result and it is necessary to revise standard find out actual result.