What is standard costing, Managerial Accounting

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What is Standard costing

Standard cost is a predetermined cost. It is a determination in advance of production of what should be the cost. When standard costs are used for the purposes of cost control the technique is known as the standard costing. The costing terminology of chartered institute of management accountants London defines standard cost and standard costing as follows:

Standard costs the predetermined cost based on a technical estimate for materials labor and overhead for a selected period of time and for a prescribed set of working conditions. 

The costing terminology of chartered institute of management accountants London defines standard cost as a predetermined cost which is calculated from management's standards of efficient operation and the relevant necessary expenditure.

 


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