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1. Historical or actual cost is that which is actually incurred on the production of a commodity or providing a service. The costs taken in previous chapters were historical costs.
2. Standard cost means a predetermined cost. It can be defined as “an estimated cost of a cost unit, prepared in advance of production or supply, correlating a technical specification of materials and labour to the prices and wages ratio estimated for a selected period of time, with the addition of an appointment of the overheads expenses estimated for the same period within a prescribed set of working conditions.
- In other words it is a predetermined calculation of how much costs should be under specified working conditions. The standard cost is based on past experience and technical aspects of goods produced. A standard cost card for each product is maintained in the organization. This card shows the details of material cost, labour cost and production overheads in respect of one unit of products. The main purpose of establishing a standard cost is to compare this cost with actual cost in order to evaluate the performance of the enterprise. Standard costs are revised from time to time in view of changed circumstances.
Wilfykil answered the question on August 6, 2019 at 09:12
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Required:
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Required:
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Date posted: August 6, 2019. Answers (1)
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Required:
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 6, 2019. Answers (1)
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Date posted: August 5, 2019. Answers (1)
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Date posted: August 5, 2019. Answers (1)
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Date posted: August 5, 2019. Answers (1)
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Date posted: April 17, 2019. Answers (1)