Types of standard costs, Cost Accounting

Types of Standard Costs

The standard cost set could be ideal, basic, attainable or current.

i. Basic Standards: These are long term standards that would keep unchanged over the years. This sole needs to show trends over time for those items as material prices, labour rates, efficiency etc.  Therefore they cannot be used to highlight current inefficiency or efficiency; for this causes, basic standards do abnormally form part of the reporting system and will consequently be used as a background for statistical analysis over time.

ii. Ideal Standards: These are standards that can be achieved under the most favourable situations. They are therefore based on the best possible operating conditions. Therefore they do not make allowances for usual production problems as like material spoilage, idle time, stoppages, machine breakdowns, shrinkage. They can be revised periodically to reflect changes in the organizations operating situations. As an example: changes in technology. Though, the ideal standards assume perfect operating conditions, since they would be unattainable in real life that has normal operating problems. As like idle time and machine breakdown, idle time and employee slowdown because of fatigue.

Posted Date: 2/7/2013 5:20:18 AM | Location : United States







Related Discussions:- Types of standard costs, Assignment Help, Ask Question on Types of standard costs, Get Answer, Expert's Help, Types of standard costs Discussions

Write discussion on Types of standard costs
Your posts are moderated
Related Questions
what is a cost sheet? what are its advantages?

JK is a motor dealership which organizes its financial statements to 30 November. In the year to 30 November 2009, transactions integrated the following: (a) JK had motor vehicl

Three of the cost items that are included in the production overhead for a factory for a period are: Machine maintenance labour $33,600 Power

what are the legal distinctions between a business combination, a merger, and a consolidation.

MARGINAL COSTING IS PREFERRED TO ABSORPTION COSTING IN DECISION MAKING WHY

The Smiths have a long-term capital loss carryover of $10,000 from 2010. On May 9, 2007, David's uncle, Joe, gave him the family antique gun collection. Based on family records

Assumptions of Break-Even Analysis 1. The break-even chart is fundamentally a static analysis; commonly changes can merely be displayed by drawing a new chart or a series of c

3. Definitions of manufacturing concepts  Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:  Materials and supplies us

A company is to produce an IC and a chip size of 120mm2 has been estimated, based on using a full-custom nMOS technology on 8" wafers. The process has a 92% yield at the wafer fab