On completion of the study of the chapter, you should be able to understand:
- What is Standard Cost?
- What is Standard Costing?
- Features, advantages and limitations of Standard Costing.
- Preliminary steps for establishing Standard Costing System.
- Types of standards.
- Distinction between Standard Cost, Estimated Cost and Actual/Historical cost.
- Distinction between Standard Costing and Budgetary Control.
- Meaning of Variance and Variance Analysis.
- Classification of Variances.
The meaning of the term ‘Standard Cost’ is predetermined cost scientifically computed for measuring the efficiency of the actual performance of an entity. According to CIMA, London, ...