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Costing & Finance
Standard Costing
A predetermined cost assigned to products based on expected material, labor, and overhead costs.
Standard Costing sets a benchmark cost for each product. Actual costs are then compared to identify variances (favorable or unfavorable).
Components
- Direct Material Cost: Expected material usage × standard price
- Direct Labor Cost: Expected hours × standard wage rate
- Manufacturing Overhead: Allocated based on machine hours or labor hours
See Standard Costing in Action
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