ECONOMICS

Detailed explanation-1: -Standard costs are predetermined costs that provide a basis for more effectively controlling costs. Standard cost offers a criterion against which actual costs incurred by the business can be measured and analyzed. The difference between actual costs and standard costs is known as variance.

Detailed explanation-2: -Standard costing is a technique where the firm compares the costs that were incurred for the production of the goods and the costs that should have been incurred for the same. Essentially it is the comparison between actual costs and standard costs. The differences between the two are variances.

Detailed explanation-3: -A Standard Cost system is a common way to budget for planned projects, managing costs in a production run, and evaluating those costs after the production has finished. This system has the benefit of giving a business hard numbers to use when creating estimates for customers.

Detailed explanation-4: -Cost control is the method of reducing business expenses by managing and analyzing financial data. Collecting costs in a consolidated format allows organizations to make more accurate and informed projections, know where they can minimize costs, and identify areas of overspending.

Detailed explanation-5: -A standard costing system involves estimating the required costs of a production process. Standard costs are estimates of the actual costs in a company’s production process because actual costs cannot be known in advance. This helps a business to plan a budget.