ACCA Applied Knowledge · Management Accounting · Standard costing system
Which of the following is the most appropriate description of a standard cost card for a product?
A standard cost card sets out the planned quantity and price of each input, such as materials, labour and overhead, for one unit of output, giving a total standard cost per unit. It is a benchmark for later comparison with actual results, not a record of actual costs.
- AA record of the actual costs incurred in producing the last batch of the product
- BA statement of the planned quantities and prices of each input, and the resulting planned cost, for one unit of outputCorrect
- CA summary of total budgeted fixed overheads for the period
- DA list of selling prices charged to customers over the past year
Explanation
A standard cost card shows, for one unit of product, the standard quantity and standard price of each material, labour and overhead input, building up the total standard cost per unit. It is a planning benchmark, not a record of actual costs, total overheads or selling prices.
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