What is a Standard or Standard Cost?
Standard cost is defined in the CIMA Official Terminology as “‘the planned unit cost of the product, component or service produced in a period. The standard cost may be determined on a number of bases. The main use of standard costs is in performance measurement, control, stock valuation and in the establishment of selling prices.” From the above definition Standard costs can be said as
• Planned cost
• Determined on a base or number of bases.
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