Differences between Standard Cost and Estimated Cost

The technique of determining both standard cost and estimated cost is the same and accounting procedures are also equally the same. But, they have the differences with each other which are given below.

Differences between Standard Cost & Estimated Cost

Standard Cost Estimated Cost
1. It gives an emphasis on "What should be the Cost". 1. It presumes that what will be the cost.
2. It uses the parameter of efficiency 2. It uses the perception of efficiency applied.
3. It is revised at frequent intervals 3. It cannot be revised since there is no need of revision.
4. It is ascertained on the assumption that free movement of cost will not be allowed. 4. It is ascertained-on the assumption that free movement of cost.
5. It is more stable in nature. 5. It is more flexible and changed at every change of situation.
6. It is a reliable tool of cost control. 6. It cannot be used as a cost control.
7. It is used only when complete cost data are available. 7. It can be used in every situation.
8. It is used for finding variances. 8. Variances cannot be find out from the estimated costs.
9. Scientific basis is applied to set standard cost. There is no scientific basis used but only approximations are used to set estimated cost.
10. It is applied if the organisation has standard costing system. 10. It is applied in every business organization

The above are some of the differences between standard cost and estimated cost.

Leave a Reply

This site uses Akismet to reduce spam. .

Recent Posts

Related pages

hundi definitionzero based budgeting disadvantagesformal and informal groups in organizationshow to file documents alphabeticallydefinition of capitalistsdisadvantages of break even analysisorganizational structure of imfobjectives of regional rural bankswhat are some of the advantages of a mixed economyadvantage and disadvantage of perfect competitionincoterm meaningwhat is precis writing with examplesaverage collection period for accounts receivableregulations of sebiconsumerism defineddefinition of privity of contractinventory stock turnoverroles and responsibilities of managerial economicsdefinition of capital expenditure budgetratio analysis in management accountingmerchant bankerstaylors principle of managementshipping cif meaningstandard audit tick marksinterfirm comparisonusefulness of variance analysismeaning of gattdefine promiseeadvantages of denormalizationmixed economy disadvantages and advantagesecommerce and ebusiness differencebailment formdefinition autocratautocracy meaningexceptions to the doctrine of privity of contractinventory turnover equationwhat is preference share capitalcif meaning in shippingdefine decentralisationimportance of departmental storegeneral agreement on tariffsmeaning of sinking fund in accountingfunctions of international development association idatypes of deficit financingtotal preventive maintenance tpmsecuritised debt instrumentsabsorption costing definitionasset securitization meaningdifferences between formal and informal communicationdisadvantages of total quality managementpreference shareholdersmatrix organisational structure advantages and disadvantagestrade receivable turnoverfunctions of non banking financial institutionsrental agreement clausesadvantages of arrfunctions of financial intermediariesalphabetic filing systemmaterial alterationimportance of physical evidence in service marketingdisadvantages of sampling methodsdiscounting of bills meaningsebi full form in hindimaterial cost variance formuladisadvantages of merging companieswhat is jettison in marine insurancemeaning of economic order quantityunderwritten sharesdeclaration of dividendhow to prepare a cash budget exampleprimary and secondary marketingnationalization of banks in indiaprivileges of holder in due coursesignificance of ratio analysis