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

Selective inventory management, Selective Inventory Management The inve...

Selective Inventory Management The inventory of an industrial firm generally comprises thousands of items with diverse prices, usage and lead time, as well as procurement and/o

Cost, Stellar Packaging Products and its primary customer, Estrella Coffee,...

Stellar Packaging Products and its primary customer, Estrella Coffee, are deciding on appropriate costing systems for their operations. Stellar Packaging Products’ manufacturing is

Comparing between real and planned outcomes , Comparing real and planned ou...

Comparing real and planned outcomes and responding to Divergences from Plan The final phases in the process outlined in figure shown below of comparing real and planned outcome

Overhead rate , During 2010, Jackson Company estimated that its manufacturi...

During 2010, Jackson Company estimated that its manufacturing employees would work 80,000 direct labor hours. During the year the company actually worked 75,000 direct labor hours.

Show process of pricing under decline stage, Q. Show process of Pricing und...

Q. Show process of Pricing under decline stage? In this stage the producer should follow the pricing strategy which may fetch revenue not less than its cost of production. If h

Explain the cost accounting, Explain the Cost accounting:         Meani...

Explain the Cost accounting:         Meaning and definition: Cost accounting is the process of accounting for cost which begins with the incurrence of cost and ends with th

Industrial Grinders, accepted#Regarding the Overhead costs, these are alloc...

accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;

Explain activity based costing versus traditional costing, Activity based c...

Activity based costing versus traditional costing Following are the main differences between activity based costing system and traditional costing system: Explain  1) Und

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