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Why do we use Standard Costs and perform Variance Analysis instead of using Actual Costs for product costing.

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Question ajoutée par Utilisateur supprimé
Date de publication: 2014/09/17
Khaled Abdelrehim ACCA DipIFR CMA
par Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

Standard cost means what a cost should be and it is used for control purposes. We prepare standard costs based on past experience, benchmarking and the average in industry, and accordingly any deviation from the standard costs mean that something is going wrong and we should apply the concept of "management by exception".

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