Estimated costs are the part of administrative accounting that is responsible for recording possible production events in order to obtain a budget, so they only represent an "attempt or estimate" in the anticipation of real costs"), therefore they are subject to rectification.[1]​.

Costs are classified according to the time in which they are determined:.

This is why the estimated costs must be adjusted to reality, resulting in “variations”, which can be of two types:

This accounting system consists of estimating the unit costs of production, where it will be necessary to predetermine the values ​​of direct raw materials, direct labor and indirect manufacturing charges or expenses that are expected in the future and subsequently make adjustments to the corresponding variations.

Having explained the above, the estimated costs are accounted for in such a way that the general variations per cost element are reflected, as well as their elimination.[2]​.

It is important to mention the differences that exist between the technical terms that exist in the Spanish language. For example:.

• Estimated vs actual: It is known as "Variation" in Latin America, while in Europe it is known as "Deviation".

• Standard vs real: It is known as "Deviation" in Latin America, while in Europe it is known as "Variation".