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

Accountiug for Fixed Assets

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. 

Expected Attainable Standard: lt is a comparison between extreme of ideal standard and normalstandard. Tnese standards

a) are set for providing operating inefficiencies which are unavoidable

b) are very realistic in nature and providing best creation for evaluation of performance

c) take into account prevailing corditions in the period for which standards are used and

d) have got the maximum uses because ihev fulfill all the requirements of good standard. So we can say these are very uselull for cost control purpose.

Basic Standard:-

Basic standard is a standard established for use over a long.period, from which a current standard can be

developed. The main disadvantage of this type of standard is that, if ii has remained unaltered over a long period of time, it mag be outdated. The main advantage is that it is shbwing the change in trend of price and efficiency from year to year

Accounting Standard 10