Actual Cost - What is standard cost and actual cost?

Q: What is standard cost and actual cost?

Standard costs are the estimated costs for products that are predetermined and arise from the units of material, labor and other costs of production for the specific time period. Actual costs refer to the costs that are actually incurred.

Answer

Predetermined units of material, labor, and other production expenses for a given time period give birth to standard costs, which are the projected costs for items. What we call "actual costs" are the ones that really pop up.

Actual Cost - What is standard cost and actual cost?

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