After reading this article you will learn about:- 1. Meaning of Standard Cost 2. Determination of Standard Costs 3. Advantages. Meaning of Standard Cost: It is the pre-determined cost of a product. After compiling different expenses, an estimated cost of product is forecasted, which is known as “Standard cost”. It is used as a device to check and lower overhead [...]
Since there are large number of determinants which influence the cost. These determinants vary from situation to situation, and enterprise to enterprise. Therefore for taking a decision about any such determinants, we must analyse them thoroughly. In order to take write decisions, it is necessary to understand different costs. Some of them are explained hereunder: 1. Actual Costs: These are [...]
To earn good profits, it is essential to keep control over each and every element of cost, such as: 1. Control on Prime Cost 2. Control on Overheads 3. Control on Indirect Materials and Tools. 1. Control on Prime Cost: Prime cost of a product has great role over the total cost. It consists of Direct Material cost and Direct [...]