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Behavioural Aspects of Standards
Budgets and Standards rely heavily on the people who have to work to meet them. Since the detailed nature of standard costing and its involvement along with foremen and production workers, communication is crucial. Production workers frequently view performance review along with a lot of suspicion, whether a cost-conscious, positive attitude is to be developed, after that close attention must be granted to the behavioral aspects of the system. In shortly, variance analysis is often not considered via those being evaluated like a neutral objective and purely technical process. This is since it has subjective and human aspects that in turn affect the employees' behaviour in the organization: These are discussed under the given headings as:
list and discus the problem encountered in adopting profit as a yardstick in measuring performance
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How does functional classification of overheads like Manufacturing overhead,Administrative overhead affect product cost or profit?
Following figures are taken from annual budget of ABC manufacturers for the year 2013: Fixed factory overhead Rs. 4,000,000 Factory overhead absorption rate Rs. 70 per direct labor
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