Standard cost and standard costing, Cost Accounting

Standard Cost and Standard Costing

To effectively control the costs of a certain organization, we require a yard stick to measure the real performance against. Traditionally, most organizations are identified to employ the previous period costs as the yardstick. But however the fast changing business environment of the world businesses operate in today, managers always determine that the previous period's performance is not a suitable yard stick to measure the next and future periods' performance against. This is why mainly organizations develop standard costs.

Therefore standard cost is a yardstick such measures how well the organization has achieved its set objectives. This easy definition standard cost implies that a standard cost is developed minimally for performance evaluation and cost control reasons. Therefore a standard cost has to be developed in advance before the real performance to be measured begins; for this purpose, a standard cost is a predetermined costs based on specific assumptions, the reader has to appreciate the fact is a standard costs is a mere estimate of expected costs under specific conditions. From the above discussion, a standard costs clearly comes out like a cost set before the actual cots are in fact incurred. Therefore some scholars refer to it like the "cost level that must be" under acceptable, attainable performance situations. Others refer to standard costs like carefully predetermined costs of production utilized as a basis for comparison and measurement.

Posted Date: 2/7/2013 5:03:53 AM | Location : United States







Related Discussions:- Standard cost and standard costing, Assignment Help, Ask Question on Standard cost and standard costing, Get Answer, Expert's Help, Standard cost and standard costing Discussions

Write discussion on Standard cost and standard costing
Your posts are moderated
Related Questions
Marginal Cost Marginal cost is the change in a firm's cost of production. It is related to a unit change in its output, or the added cost of producing the next unit. The margin

ln an attempt to conceal a thefi of funds, Kaito Kid, controller of Shinichi Products, lnc. placed a bomb in the company s record vault. The ensuing explosion left only fragments o

need help with master budget

tHE FIRST SECTION ASSIGEMTN ANSWER FOR HAMPSHIR COMPANY DECISIONS

Flexible budgets provide different information than static budgets. Discuss some of these differences. Is a flexible budget always better? Are there times when you’d recom

The difference among "cost accounting" and "financial accounting are terms demote to the accounting techniques used internally by a company's management to explain the costs of run

In this section we have tried to develop the concept of flow of funds inside the organization. Starting along with the funds requirement for an organization, we have tried to trace

You perform a travel cost study that looks at the relationship between the cost of visiting a lake (including costs of travel, value of time spent not working & any entry fees), it

Usefulness of Variance Analysis Carefully note that while prices are being charged to production, it can be done at the actual or standard price. For purposes of making varian

Determine Equivalent Units of the Product Let assume there are 4,000 units of a product in ending inventory out of that 60 percent are fully complete whereas the remaining are