ECONOMICS

Detailed explanation-1: -Standard costing is a system of accounting used to accumulate costs on products or services. They also compare unforeseen expenditures, cost variances, and waste deviations. Standard costs are predetermined by human factors such as labor, material, machinery, and other production elements.

Detailed explanation-2: -Standard Cost is budgeting the cost to produce one unit of an item. You establish and assign a set of costs for each production segment of the item-direct material, direct labor, indirect labor, and machine hours. These costs are used to record cost of production for all like items.

Detailed explanation-3: -In accounting, a standard costing system is a tool for planning budgets, managing and controlling costs, and evaluating cost management performance. A standard costing system involves estimating the required costs of a production process.

Detailed explanation-4: -Simplicity The costing system should be simple to operate and easy to understand. The facts, figures, and other information revealed by cost accounts should be presented in a way that makes them easy to grasp. As such, the needless elaboration of costing records should be avoided.

Detailed explanation-5: -Standard costing is typically used in manufacturing to determine the cost of products based on standard rates for materials, labor, and overhead. Companies use standard costing to set target costs for production and then compare actual production costs to the target costs.