What is stardard costing?

Standard costs are usually associated with a manufacturing company's costs of direct material, direct labor, and manufacturing overhead.

Rather than assigning the actual costs of direct material, direct labor, and manufacturing overhead to a product, many manufacturers assign the expected or standard cost. This means that a manufacturer's inventories and cost of goods sold will begin with amounts reflecting the standard costs, not the actual costs, of a product. Manufacturers, of course, still have to pay the actual costs. As a result there are almost always differences between the actual costs and the standard costs, and those differences are known as variances.

1. The estimated cost of a process, resource, or item used in a manufacturing enterprise, 

Standard Cost for Direct Expenses in manufacturing? 

Standard costs are usually associated with a manufacturing company's costs of direct material, direct labor, and manufacturing overhead.

A standard costing system initially records the cost of production at standard. Units of inventory flow through the inventory accounts (from work-in-process to finished goods to cost of goods sold) at their per-unit standard cost. When actual costs become known, adjusting entries are made that restate each account balance from standard to actual (or to approximate such a restatement). The components of this adjusting entry provide information about the company’s performance for the period, particularly with regard to production efficiency and cost control.

If actual costs are greater than standard costs the variance is unfavorable. An unfavorable variance tells management that if everything else stays constant the company's actual profit will be less than planned.

If actual costs are less than standard costs the variance is favorable. A favorable variance tells management that if everything else stays constant the actual profit will likely exceed the planned profit

Standard costing are estimates of what unit costs should be , based on past costs, and engineering estimates.

*Standard costing****************************××××××

Standard costing is setting an expected cost for accounting period and than comparing the expected and actual cost for that period.