Standard cost : In the accounting records, the term standard cost refers to the practice of replacement of an expected cost for an actual cost. Then the difference between the expected costs and actual costs showing the variance are also recorded periodically. A standard costs is also known as target cost or predetermined cost. Standard cost system: Standard cost system to the accounting systems which use standards for product cost. Standard cost system enable management to determine the following: How much a product should cost (standard costs). How much actually does it cost (actual cost). The standard cost per dining room table.

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Chapter 23, Problem 23.2EX

(a)

To determine

Standard cost:

In the accounting records, the term standard cost refers to the practice of replacement of an expected cost for an actual cost. Then the difference between the expected costs and actual costs showing the variance are also recorded periodically. A standard costs is also known as target cost or predetermined cost.

Standard cost system:

Standard cost system to the accounting systems which use standards for product cost. Standard cost system enable management to determine the following:

How much a product should cost (standard costs).

How much actually does it cost (actual cost).

The standard cost per dining room table.

(b)

To determine

To explain: The reason behind the use of standard cost system by Company WYLTM.

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