ECONOMICS

Detailed explanation-1: -Definition: A budgeted cost is a forecasted future expense that the company is expected to incur in the future. In other words, it’s an estimated expense that management anticipates will be incurred in a future period based on projected revenues and sales.

Detailed explanation-2: -Typically, small companies set budgets on an annual basis. Projected costs are based on prior sales numbers and anticipated increases in expenses. Actual costs result when money is actually spent on the various supplies, services and other expense categories used by the business.

Detailed explanation-3: -BCWP is calculated by multiplying the percentage of the project that has been completed by the project’s total budget. The formula reads as follows: BCWP = % Work Performed (Actual) x Project Budget.

Detailed explanation-4: -Estimated expenses of budgeted production.

Detailed explanation-5: -Definition of Standard Cost A standard cost is described as a predetermined cost, an estimated future cost, an expected cost, a budgeted unit cost, a forecast cost, or as the “should be” cost.