Standard Cost vs Estimated Cost

 

Standard Cost vs Estimated Cost

 

Standard Cost	Estimated Cost
Based on scientific analysis and engineering studies. Determines what cost should be.	Based on historical accounting. Estimate of what cost will be. Guess work or reasonable estimate.
Used as a device for measuring efficiency.	Cannot be used for measuring efficiency. Only determines the expected costs.
Helpful in cost control and analysis of variance enables to take corrective measures.	Purpose is to find out selling price in advance to take decision whether to purchase or to make and also to prepare financial budgets.
Not easily changed. More static.	Revised with change in conditions.
Part of cost accounting.	Statistical in nature, not a part of accounting. Used by concerns using historical costing.