Glossary

Standard Cost

Tags: Glossary

The predetermined cost of producing a product, including direct materials, labor, and overhead expenses.

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What is a Standard Cost and How is it Calculated?

Standard Cost is the estimated cost of producing a product or providing a service, assuming a certain level of efficiency in the production process. It is calculated by estimating the direct material cost, direct labor cost, and manufacturing overhead for each unit of product or service. The standard cost serves as a benchmark for actual production costs and is used in cost accounting to calculate variances between actual and standard costs. 

Related Glossary terms

First Cost (FC)

Free In and Out (FIO)

Free In (FI)

Incremental Cost to Export

Landed Cost

Order Cost

Routing

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