What is standard cost in SAP SBO - SAP Business One?

SAP Term: standard cost

• Component: SBO

• Component Name: SAP Business One

• Description: The item cost is copied from the Item Master Data without any additional calculations.

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• Key Concepts: 
  Standard cost is a method of cost accounting used in SAP Business One (SBO). It is a predetermined cost assigned to a product or service that is used to calculate the cost of goods sold (COGS) and inventory value. Standard costs are based on historical data and are used to compare actual costs to the predetermined costs. 
  
  How to use it: 
  In SAP Business One, standard costs are used to calculate the cost of goods sold (COGS) and inventory value. The standard cost is determined by taking the average of the historical costs of the product or service. This average is then used as the predetermined cost for the product or service. The actual cost of the product or service is then compared to the predetermined cost to determine if there is a variance. 
  
  Tips & Tricks: 
  When setting up standard costs in SAP Business One, it is important to ensure that the historical data used to calculate the average cost is accurate and up-to-date. Additionally, it is important to regularly review and update standard costs as market prices can fluctuate over time. 
  
  Related Information: 
  Standard costs are just one of many methods of cost accounting used in SAP Business One. Other methods include actual costing, moving average costing, and FIFO costing. Each method has its own advantages and disadvantages, so it is important to research each method before deciding which one is best for your business.