Standard Cost Accounting
Standard Cost Accounting is a method used by businesses to establish predetermined costs for the production of goods or services. This approach involves setting standard costs for various inputs such as materials, labor, and overhead, based on historical data and industry norms. These standard costs act as benchmarks against which actual costs can be compared, allowing businesses to identify variances and analyze the reasons behind them. By using standard cost accounting, organizations can better plan and control their costs, improve efficiency, and make informed decisions about pricing, budgeting, and performance evaluation.
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