In.............................................costs of all manufacturing factors (direct materials, direct labor and manufacturing overhead) are based on the standards that are previously determined using scientific techniques and methods. Thus, product cost is already known at the beginning of the year. At the end of the year, standard costs and actual costs are compared and, if necessary, the standard costs are adjusted to actual
values to be reflected in financial statements. 

Which of the following should come to the dotted place according to the whole sentence?