A subscriber to PurchTips responded to this week’s article “Spend Analysis: Whatcha Looking For?” and asked for my definition of “standard cost” as used in the article. Here it is…

Don’t miss updates on Procurement & Supply Chain, Subscribe here!

A standard cost is an estimated cost assigned to each purchased material or item by the accounting department of an organization. Standard cost accounting is used primarily by manufacturing organizations for the purpose of budgeting at the beginning of each fiscal year.

To Your Career,
Charles Dominick, SPSM
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

More Posts