My Definition of Standard Cost

A subscriber to PurchTips responded to this week's article "Spend Analysis: Whatcha Looking For?" and asked for my definition of "standard cost" as used in the article. Here it is...

A standard cost is an estimated cost assigned to each purchased material or item by the accounting department of an organization. Standard cost accounting is used primarily by manufacturing organizations for the purpose of budgeting at the beginning of each fiscal year.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com