standard costs and budgeting costs
System
Posts: 100,534 🤖 Admin 🤖
Hi there,<BR>I am warming up for my september tech level,at the moment i am reading the old Osborne book about managment of costs.I find it is very diffcult to get my head around through standard costing especially the calculation of variances.<BR>i really need your guys help,please maybe my quesion sounds really silly even ridiculous ,but can anyone tell me what the difference between standard costs and budgeting costs.when you calculate the variance of the costs ,my understaning is comparing the standard with actual costs ,but why in the question always show the budget figure???<BR>Anyway if my question is rather confusing already,please forgive me .basically i just want to make clear the relationship of standard ,actual and budgeting <BR><BR>Thank you very much in advance<BR>chaolissaat
0
Comments
-
standard costs and budgeting costs
<BR>Say you budget to make 1,000 units at £10 each.<BR>Budgeted cost = £10,000<BR><BR>If you only make 900 units then your standard cost is what it should have cost<BR>£10 a unit x 900 = £9,000<BR><BR>Which you use depends on the variance. <BR><BR>The fixed overhead variances use the budget figures because you're comparing how many hours you thought you could use the factory for with how many hours of work you did get out of it.0 -
standard costs and budgeting costs
Hi everybody,<BR><BR>The difference between the standard costs and budgeting costs is so simple.<BR><BR><BR>Standard cost is the cost for one unit only, while the budgeting cost is the cost for the whole budgeted production.<BR><BR>hope this help0