Standard cost systems make use of standard costs, which are the budgeted or estimated costs deemed to be necessary to manufacture a single unit of product or perform a single service. Standards are traditionally established for each component (material, labor, and overhead) of product cost. Actual costs are compared to standard costs to determine variances (the difference between the actual cost and the cost that was expected to be incurred). In a standard cost system, both standard costs and actual costs are recorded in accounting records. This dual record keeping affords an element of cost control by providing norms against which actual costs operations can be compared.
See Accounting system implications of TOC; Activity-based costing: An evaluation; Activity-based costing; Standard costing; Standard time; Target costing.
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Barfield, Jesse T., Cecily A. Raiborn and Michael R. Kinney (1994). Cost Accounting: Traditions and Innovations, West Publishing Company, St. Paul, Minnesota.
Henke, Emerson O. and Charlene W. Spoede (1991). Cost ccounting: Managerial Use of Accounting Data, PWS-Kent Publishing Company, Boston, Massachusetts.
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© 2000 Kluwer Academic Publishers
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(2000). STANDARD COST SYSTEM . In: Swamidass, P.M. (eds) Encyclopedia of Production and Manufacturing Management. Springer, Boston, MA . https://doi.org/10.1007/1-4020-0612-8_909
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DOI: https://doi.org/10.1007/1-4020-0612-8_909
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