Question

five advantages of standard cost

Answer 1

Standard Cost is the ideal cost of making the product. Advantages are:

1.It sets the benchmark for the cost of goods produced.

2. Variances can easily be calculated based on standard cost and actual cost data. Can be further broken down into price and efficiency variances to identify the root cause of the problem.

3. It gives a direction to the company as well as workers.

4. Helps in cost cutting and efficient utilization of resources.

5. Useful in Decision Making related to product lines.