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Yes!
A standard cost system determines product cost by using, in the inventory accounts, predetermined norms for prices and/or quantities of component elements. After production is complete, the standard production cost is compared to the actual production cost to determine the efficiency of the production process. A difference between the actual quantity, price, or rate and its related standard is
called a variance.
Standards can be used in a job order system only if a company typically engages in jobs that produce fairly similar products. One type of standard job order costing system uses standards only for input prices of material and/or rates for labor. This process is reasonable if all output relies on basically the same kinds of material and/or labor.
called a variance.
Standards can be used in a job order system only if a company typically engages in jobs that produce fairly similar products. One type of standard job order costing system uses standards only for input prices of material and/or rates for labor. This process is reasonable if all output relies on basically the same kinds of material and/or labor.
If standards are used for price or rate amounts only, the debits to Work in Process Inventory become a combination of actual and standard information: actual quantities at standard prices or rates.
