● Standard costing includes pre-determination of costs under specific working conditions.
● In this process, the standard quantity of machine time, labor time, and material is calculated and the future market trend for price standards is analyzed.
● Standard costing helps in variance analysis.
● Along with fixation of sale price, it also provides valuation of stock and work in progress.
● Material, labor, and overheads cost are ascertained.
● Actual cost is measured.