Advantages-disadvantages-standard costing, Managerial Accounting

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.

 

Posted Date: 12/7/2012 8:27:32 AM | Location : United States







Related Discussions:- Advantages-disadvantages-standard costing, Assignment Help, Ask Question on Advantages-disadvantages-standard costing, Get Answer, Expert's Help, Advantages-disadvantages-standard costing Discussions

Write discussion on Advantages-disadvantages-standard costing
Your posts are moderated
Related Questions
Kent Company had 800 units of product in its assembly department's work in process inventory at the starting of the period. During the period 3,000 additional units of product were

1. In order to boost the housing market throughout 2009 and into 2010, the federal government offered a tax credit to first-time home buyers and some repeat buyers.

I have two problems due in two hours can you do this for me?

Mosman Ltd makes a single product. The projected sales for the first month of the coming year and the starting and ending inventory data are as follows:   Sales  80,000 units Uni

For this assignment, please complete and submit Task 1 and Task 2 as described below. Task 1: Classifying Cash Flows The following are transactions, events, and changes in balances

JIT and Management Accounting Management accountants in many organizations have been criticized because of their failure to change their managing accounting system to reflect

Transition probabilities These are the probabilities of moving from one state to another in the next time period. Usually they are written in the form of a probability matrix.

INTRODUCTION AND RATIONALE The purpose of this assignment is to help students further develop a number of the skills and knowledge required and valued by the accountancy profe

Explain Short term budgets Short term budgets: these budgets are generally for one or two years and are in the form of monetary terms. The consumer's good industries like su

M/s ABC is seeing relaxing its collection efforts. At current its sales are as Rs.40 lakhs, the ACP is here 20 days and variable cost to sales ratio is .8 and bad debts are as .05