ECONOMICS

Detailed explanation-1: -The next step is to compare the actual costs that occurred with the standard costs determined earlier. The difference between them is known as a variance.

Detailed explanation-2: -In any organization, there are three critical stages in the standard costing cycle: production, marketing, and accounting. Each stage has its own specific purpose and requirements. To complete the standard costing cycle for your organization, you must first understand the steps involved in each stage.

Detailed explanation-3: -The three general categories of costs included in manufacturing processes are direct materials, direct labor, and overhead.

Detailed explanation-4: -The difference between actual cost and standard cost is called variance. A variance is unfavorable if actual cost is higher than standard cost. If actual cost is lower, the variance is favorable.

Detailed explanation-5: -The main costing methods available are process costing, job costing and direct costing. Each of these methods apply to different production and decision environments.