Standard Cost Setting Method

1, standard cost usually includes five kinds: ideal standard cost, normal standard cost, current standard cost, basic standard cost and realization standard cost.

The specific steps are: 2, the development of standard cost usually starts from three aspects: direct material cost, direct labor cost and manufacturing cost.

Direct material cost refers to the material cost directly used for product production, which includes two aspects: standard dosage and standard unit cost.

The standard dosage of materials should first be based on product drawings and other technical documents for product research, list all kinds of materials and possible substitute materials, and explain the types, quality and inventory of these materials.

Secondly, through the analysis of past records of material experience, the average dosage, or the maximum or minimum value, or the most economical quantity, or by actual measurement or technical analysis, can be used to formulate the dosage standard scientifically.

The direct labor cost refers to the labor cost directly used for product production.

When formulating the direct labor cost standard, we must first study the production process, study the processes, operations and processes.

Secondly, we should study the form and system of wage payment, so as to formulate standards according to the actual situation.

Manufacturing costs can be divided into two parts: variable manufacturing cost and fixed manufacturing cost.

The manufacturing cost of these two parts is calculated according to the product of standard dosage and standard distribution rate, and the standard dosage is generally expressed by working hours.

The formulation of the above standard cost can be carried out through the preparation of standard cost list.