Standard costing is a cost accounting method where predetermined costs are set for materials, labor, and overhead, and actual costs are then compared against these standards. The purpose is to identify variances, improve cost control, and support management review. It is widely used in manufacturing and process-driven environments where performance measurement is important.
Systematic Allocation
Systematic allocation means spreading a cost over time or across units using a consistent and rational method. Depreciation and amortization are common examples of...
Suspense Account
A suspense account is a temporary account used to hold amounts when the correct accounting treatment or account head is not yet known. It...
Sunk Cost
A sunk cost is a cost that has already been incurred and cannot be recovered, regardless of future decisions. Since it cannot be changed,...
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