Question

difference between standard cost and actual cost is called?​

Answer 1

the difference between standard cost and actual cost is called variance

Answer 2

The difference between the standard cost and the actual cost is called "Variance"

• Standard cost is "the estimated cost of a process or item used in a manufacturing enterprise and compared with the actual cost so that anomalies are readily detectable."
• Actual cost is "the cost of a product based on incurred costs of material and labor required in its production."
• The difference between the two given terms is called variance.
• Variance is "the actual unit cost of an item less its standard cost, multiplied by the number of actual units purchased."
• This is used to keep a check on the cost incurred and in case of negative material costs, the management takes action to correct it.

• There are various methods to derive the price variance.