standard costiong

Standard costing is a technique which establishes predetermined estimates of the costs of products & servces known as standard costs & then compared these standards(predermined costs)with actual costs incurred.The difference between 2 is called Variance.

for understanding...One has to think on the perspective of company & set standard for expenses(b4 it incurred)then compare it with actual expense(when it incurred),if actual expense is less than the standard,as it is better for company ,hence known as Favourable.otherwise unfavourable.

 defined by CIMA- a method of determining cost whereby statistics are prepared to show

a)standard cost

b)actual cost

c) deviation between the above two to determine variance