Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following is not a component of standard costs?

1. Material costs

2. Labor costs

3. Variable costs

4. Marketing expenses

The correct answer is: Marketing expenses

Standard costs are predetermined costs used to estimate the expected expenses of producing goods or services. These costs typically include the expected expenses for materials, labor, and other production-related activities. Material costs refer to the expenses associated with the raw materials required for production. Labor costs involve the expected wages or salaries for employees directly engaged in manufacturing or service delivery. Variable costs, which fluctuate with production levels, can also be part of standard costing, as they directly relate to the production process. Marketing expenses, on the other hand, are not included in standard costs. They pertain to the costs incurred to promote and sell products or services rather than the costs tied directly to production. This distinction is crucial because standard costing focuses primarily on the manufacturing or service delivery aspects of cost control and does not encompass selling, general, or administrative costs, which would include marketing expenses.