A brief description of the difference between standard cost and actual cost

The standard Cost method and the actual cost method do not have the merits and demerits, the key is to choose the appropriate method according to the enterprise characteristic.

Using standard costs is relatively simple compared to actual cost accounting.

Nutshell:

Using the standard Cost method,

Whether in storage or in the lead,

In accordance with the established standards,

Adjust variance according to invoice;

Using the actual Cost method,

Each time the storage is recorded according to the actual cost,

Each storage cost may be different, the lead time will be more complex, you need to calculate cost-based cost of the library,

Increased the determination of the price of the out-of-stock

than the standard cost of work,

For example, when using the moving weighted average method,

Every time out of the library

When the price is calculated,

At the same time, according to the material to be used to adjust inventory and WIP.

If you ever come across a system

Product transfer, material return, the actual cost method is more complex to deal with, the standard cost is much less than the calculation process.

Standard costs can be effectively controlled by cost,

Can be done in real time such as links,

Cost control and volatility of projects, etc.

A comparative analysis of the causes. The actual cost is weaker in the immediacy of the cost control because of the complexity of the computational process.

Calculation formula under Standard Cost method:

"Standard Cost

-

Cost Variance

=

Actual Cost "

，

Break the traditional cost accounting afterwards

Accounting limitations, emphasis on pre-planning, in-process control, after-the-fact comparative analysis, through the standard cost of the formulation,

In the production process, the cost difference inspection control, the periodic cost analysis, unifies the three, forms the cost forecast, the plan,

A complete cost management system for decision-making, control, analysis, and assessment integration.

The actual cost method conforms to the historical cost principle,

The data is objective and reliable. For raw material prices fluctuate frequently,

Production process

Frequent changes,

Bom

It is difficult to determine the enterprise, the cost of work often change, the cost standard is difficult to determine, should choose the real

Cost-of-money method.

A brief description of the difference between standard cost and actual cost