The standard cost method is characterized by

The advantages of standard cost method include: timely feedback of differences of different nature, which is conducive to performance evaluation; Make budgeting more scientific and feasible, and help enterprises to make business decisions.

Standard cost method: also known as standard cost system or standard cost accounting, refers to a cost management system that takes standard cost as the core and integrates cost accounting, control, assessment and analysis through a series of organic links such as standard cost formulation, implementation, accounting, control and variance analysis to achieve the purpose of cost management.

Standard cost accounting treatment: set up product cost subsidiary ledger according to each cost calculation object. "Production cost", "inventory goods" and other subjects can only register standard costs, set up various cost variance subjects, and account for various differences respectively.

Under the standard cost method, the standard cost of actual output is registered in the accounts of "production cost" and "inventory goods", and as for various differences, a separate cost difference account can be set up for accounting.

For direct material cost variance, two accounts of "material price variance" and "material consumption variance" should be set up; For direct labor cost variance, two accounts should be set up, namely direct labor wage rate variance and direct labor efficiency variance; For the variance of variable overhead, two accounts should be set up, namely "Variance of Variable Overhead Consumption" and "Variance of Variable Overhead Efficiency";