Standard cost is considered a predetermined unit cost of an item. For example, a company will predetermine how much labor or direct material cost is needed to produce one piece. (Kimmel & Weygandt, 2017, p. 637) The organizational budget develops from the standards determined. Companies can improve product costing, control costs, and improve the decision-making process. For example, the furniture company Lovesac has been in the market for two decades. The standard costing system helps the company set costs for materials and labors. Without determining standard costs, the company would not be able to quote a price to customers who custom design their couches of different modules. Kimmel, P. D., & Weygandt, J. J. (2017). Survey of accounting (p. 637). Hoboken, Nj: John Wiley & Sons, Inc.