Ideal standard
An ideal standard is a performance benchmark based on perfect operating conditions — no waste, no idle time, maximum machine efficiency — that cannot be achieved in practice; because it permanently generates adverse variances, it is.
FrameworkStandard costing
See it move
An ideal standard assumes zero material waste, no machine stoppages and workers moving at their theoretical maximum pace, so every actual result compares unfavourably and every variance report reads adverse. An attainable standard instead allows for normal waste and realistic downtime, so its variance genuinely distinguishes real inefficiency from ordinary operating conditions, which is why most organisations use it for routine control.
Check yourself
A process engineer calculates the minimum possible direct materials cost for a product by assuming zero waste at every production stage, no machine stoppages and full utilisation of all input materials. She uses this figure to quantify the total inefficiency pool available for elimination over the next five years and to justify a capital investment proposal. What type of standard is she using?