standard cost
Budgeted unit price
Standard cost is a predetermined estimate of what a product or service should cost under normal operating conditions.
Businesses set standard costs for materials, labor, and overhead to serve as benchmarks against which actual costs are measured.
The difference between standard and actual costs is called a variance: We're investigating why labor costs exceeded standard.
Standard costing helps with budgeting, pricing decisions, and identifying inefficiencies.
- budgetedAllocated funds systematically
- varianceSpread around the mean
- overheadLocated directly above
- manufacturingIndustrial product creation
- actualExisting in fact
budget variance · benchmark · baseline · ledger · accounting · efficiency · estimate · target · predetermined · labor · raw materials · materials · factory · deviation · inventory · allocation · production · direct labor
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