Standardikulut

Standardikulut, or standard costs, are pre-determined costs assigned to the production of a unit of product or service under normal operating conditions. They function as targets for planning and control and are used to value inventory and analyze cost variances.

Typical standard cost components include standard direct material cost per unit, standard direct labor cost per unit, and standard overhead cost per unit (which may be subdivided into variable and fixed overhead). The total of these components yields the standard cost per unit.

Standards are established through a combination of historical data, engineering specifications, time-and-motion studies, and expected capacity utilization. They reflect what costs should be under efficient operation and are updated periodically to reflect price changes and process improvements.

In practice, standard costs are used for budgeting, planning, product costing, and performance measurement. In variance analysis, actual costs are compared with standard costs, producing material variances, labor variances, and overhead variances. A favorable variance indicates costs were lower than expected, while an unfavorable variance indicates higher costs.

Inventory is typically valued at standard cost under this method, with any difference between actual and standard cost recorded as variances in dedicated accounts. Depending on the accounting policy, variances may affect cost of goods sold or be allocated to production.

Advantages of standard costing include simplified costing, improved budgeting, and early detection of cost deviations. Limitations include the risk of outdated or unrealistic standards, potential distortions if standards are not well aligned with actual conditions, and the need for ongoing maintenance to stay relevant.