Advantages-disadvantages-standard costing, Managerial Accounting

Assignment Help:

The advantages and disadvantages of standard costing

The benefits for controlling having a standard costing system in operation can be summed up as follows;

  • Cautiously planned standards are a help to more precise budgeting.
  • Standard costs give a yardstick against that real costs can be measured.
  • The setting of standards includes determining the best materials and techniques which might lead to economies.
  • A target of effectiveness is set for employees to arrive at and cost-consciousness is stimulated. 
  • Variances can be computed that enable the principle of management by exception to be operated. Only the variances that exceed acceptable tolerance limits require to be investigated by management with a vision to control action.

 

The disadvantages of standard costing include the following:

  • It is difficult to set accurate standards.
  • The collection and analysis of data to run a standard costing system may be very time-consuming.
  • Standards may be seen as a pressure device.

 


Related Discussions:- Advantages-disadvantages-standard costing

direct materials price and efficiency variances, Welcome to the Fall 2011 ...

Welcome to the Fall 2011 version of the comprehensive assignment prepared specifically for Accounting 294. Made up of 3 parts this assignment is meant to fulfil a number of obje

What are the objectives of budgetary control, What are the Objectives of bu...

What are the Objectives of budgetary control 1) Planning : planning is an important managerial function. it helps to decide in advance, what to do how to do it when to do it a

Asset securitisation, The emerging financial scenario has made a fierce com...

The emerging financial scenario has made a fierce competition among the companies to raise funds by innovative financial products by the capital and or money markets. Moreover sour

Which of the following costs is an example of a cost, Which of the followin...

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Overhead analysis sheet, .1 You are the Management accountant of an industr...

.1 You are the Management accountant of an industrial concern and have been assigned the duty of preparing a cost accounting system. Initially it has been decided to prepare three

Use of computer systems in linear programming, Use of Computer Systems in L...

Use of Computer Systems in Linear Programming When a computer is to be used for linear programming there are a number of steps: (1) Development of the equations which descri

Optimum cash balance - baumols model, The Baumol Model in 1952 considers ca...

The Baumol Model in 1952 considers cash management complication as same to inventory management problem. For itself the firm attempts to minimize the total cost that is the sum of

2010, how to journalize entry. purchased $150,000 of raw materials on accou...

how to journalize entry. purchased $150,000 of raw materials on account, terms of 2/20; n/30

Functions of the treasury department, The significant functions of a treasu...

The significant functions of a treasury department are as given below: a) Setting up corporate financial goals Financial strategies and aim Treasury and financial po

Total inventory costs formula , Total inventory costs formula Total in...

Total inventory costs formula Total inventory costs will be as follows: Total inventory costs = Purchase price cost + carrying costs + stock-out cost + order costs. Tota

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd