Definition of Standard cost:
Estimates of cost costs for processes, resources or items used in a manufacturing company are posted in the accounts and compared to the actual costs so that irregularities can be easily identified.
Default estimates or prices for doing or producing goods under normal circumstances.
Standard costs are used as a basis for comparing target costs (or actual costs) and are generated from the analysis of historical data or the study of time and movement. These costs are almost always different from the actual costs, as each situation has its share of unforeseen factors. Also called normal charge.
How to use Standard cost in a sentence?
- In this budget, standard costs are used for each production step.
- Before entering this market and paying them for their hard earned money, I want to know the standard price of my product.
- Companies usually offer their services based on the company's work history to provide customers with a normal or standard service fee.
- If you have extra money for your product, you may want to sell it below the standard price to get rid of it.
Meaning of Standard cost & Standard cost Definition