Standard Costs - Standard Costs ,,intotaldollarssoan...

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Standard Costs When budgets are prepared, the costs are usually computed at two levels, in total dollars so an  income statement can be prepared, and cost per unit. The cost per unit is referred to as a  standard  cost . A standard cost can also be developed and used for pricing decisions and cost control even if  a budget is not prepared. A standard cost in a manufacturing company such as Pickup Trucks  Company consists of per unit costs for direct materials, direct labor, and overhead. The per unit costs  can be further divided into the expected amount and cost of materials per unit, the expected number  of hours and cost per hour for direct labor, and the expected total overhead costs and a method for  assigning those costs to each unit. Within the expected amount of materials, waste or spoilage must  be considered when determining the standard amount. For example, if a product, such as a chair, 
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