Difference between standard cost and standard costing

Reference no: EM13547375

Explain and illustrate the difference between standard cost card under marginal and absorption costing.

Scenario

Alpha manufacturing company produces a single product, which is known as Sigma. Company plans to produce 10,000 units in the month of October. The product requires a single operation and the standard cost for this operation is presented as follows:

Direct materials:

2kg of A at $10 per kg

1 kg of B at $15 per kg.

Direct labour:
3 hours at $9 per hour.

Variable overhead:

3 hours at $2 per direct labour hour

Fixed production overhead cost is $120,000 and is absorbed according to the labour hour basis.

1. Explain and illustrate the difference between standard cost and standard costing.

2. Using the above data draw up a standard cost card under marginal and absorption costing.

Reference no: EM13547375

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