|Overview: Normal Costs|
What are Normal Costs?
John Spacey, updated on July 12, 2023
Normal costs are approximations of production costs that are calculated using actual material costs, actual labor costs and estimated overhead. The estimate of overhead is typically based on historical averages or predetermined rates. If the estimate of overhead later turns out to be inaccurate, this can be handled as a variance. Normal costs are used to estimate the cost of goods sold and value of inventory.
Business CostsThis is the complete list of articles we have written about business costs.
If you enjoyed this page, please consider bookmarking Simplicable.
A list of common types of business cost.
A principle of financial accounting.A list of common types of business cost.
A definition of cost escalation with an example.
Common examples of cost reduction.
The common types of cost estimate.A definition of relevant cost with examples.
Detailed examples of how to map out the cost structure of a business.
The definition of cost competition with examples.
An overview of cost goals with examples.A list of common business risks. The four things that can be done about risk. A list of techniques for reducing risk. The potential that you'll achieve too much of a good thing.
Any risk that people have a strong aversion too.
The surprising similarities between risk and opportunity.
The difference between risk management and contingency planning.The common types of uncertainty in decision making and strategy.
The common types of inventory risk.
An overview of common business risk management techniques.
TrendingThe most popular articles on Simplicable in the past day. Recent posts or updates on Simplicable. Site Map