Components of Standard Cost Homework Help
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What is Standard Cost?
The substitution of expected cost to the actual cost in the book of records is called as standard costing method. The variances in them are periodically recorded and the difference between the actual and expected cost is varied. This method is an advantage over the cost layering systems where the cost information huge in amount is maintained throughout till the stock is maintained. Examples are FIFO and LIFO. In this Components of standard cost homework help we discuss the various attributes of standard cost.
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Standard Cost Components
The most recent actual costs can be observed for a process or product and their average is found out in order to create standard cost. In our Components of standard cost homework help article, we highlight some extra components that can help to provide standard costing.
1. Equipment age is the important as per our Components of standard cost homework help writers. If the machine equipment is near to its life span end then it would just produce more amount of scrap than useful product.
2. Equipment set up speed is to be observed and it should be maximized to minimize the time consumption.
3. Labour efficiency changes are to be done while installation of new set up or machineries are to be done.
4. Learning curve is a relationship between the standard labor cost and the production volume. As per our Components of standard cost homework help article, standard cost decrease with increase in production volume if the staff is efficient.
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