Standard costing in modern environment, Managerial Accounting

Standard costing in modern environment

Standard costing has traditionally been associated with labor-intensive operations, but it can be applied to capital-intensive production too. With the shift to an ‘advanced manufacturing technology’ environment we have seen the following.

  • The introduction of robotics
  • The introduction of lithe manufacturing systems (FMS).
  • Computer aided design and computer aided manufacture (CADCAM) systems.
  • Job flexibility, with workers capable of being moved from one aspect of work to the other. Traditional one-man-one-machine manufacturing system does not apply.

 

It is quite possible that with manufacturing technology variable overheads are incurred in relation to machine time rather labor time, and standard costs should reflect this where appropriate.

With CADCAM systems, the planning of manufacturing requirements can be computerized, with the useful spin-off that standard costs can be constructed by computer, thus saving administrative time and expense while providing far more accurate standards.

Posted Date: 12/8/2012 2:46:36 AM | Location : United States







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