And just to clarify Sean's clarification, which is correct...
The entire premise behind standard costing is that different business functions do not impact each other in terms of cost and profit calculations. You then manage the performance of each cost/profit centre (procurement, manufacturing or sales) through variances.
So with procurement, if they have significant purchase price variances for a period then questions need to be asked as to whether the market for raw materials has changed and prices have gone up or whether the buyer's have failed to get the volume discounts that they were expected to achieve.
With manufacturing, if there are large actual variances then has productivity been down or if there are large engineering variances then has the process been changed for the worse.
For sales there's no variances, but instead you're looking at profit margin so did the sales team make the agreed profit or did they discount too heavily to get the agreed volumes?
The idea is that you can manage each area through the financials and one does not affect the other. For example, if you used actual costing then the reported profit margin would be impacted by how much was actually paid for the raw materials and how productive the manufacturing function is. This muddies the waters and makes it far more difficult to determine whether the sales teams are meeting their KPIs. Likewise, you know that manufacturing variances are caused directly by issues in manufacturing and not on movements in your raw material prices. The true cost of doing business is the combination of the standard costs and variances combined.
The beauty with standard costing is that you can do your transactions in any order. So, if you're happy for your inventory numbers to be out of kilter for short periods, you can ship confirm inventory before you have even created the work order or purchased the raw materials. As long as all transactions are competed before the end of the reporting period everything will wash out correctly in the end. Not generally a recommended approach as it makes tracking transactions and stuff ups more difficult and can cause your inventory to be constantly out (especially if it is occurring because of poor discipline rather than a true business need) but it can make sense in some situations.
For anyone that works in this space I would strongly recommend reading up on management accounting theories. There are plenty of good textbooks on management and cost accounting available. It is amazing how many accountants we encounter during implementations that don't actually understand these concepts and have to be convinced that standard costing is far more for appropriate for their business than actual.