Difference between budgetary control and standard costing

Budgetary control

The budgets are prepared for the concern as a whole.

The budgets are fixed on the basis of past records and future expectations.

The scope of budgetary control is much wider than the scope of standard costing. Budgets are set for incomes. Expenditures and other activities etc.

In budgetary control the targets of expenditure are set and these targets cannot be exceeded. In this system the emphasis is on keeping the expenditures within the budgeted figures.

Budgets are set on the basis of present level of efficiency.

Budgetary control is related to financial accounts.

Budgetary control seals with total variances only. The variance may be calculated for different departments or for the concern as a whole.

Standard costing

The standards are set for producing a product or for giving a service.

Standard costs are fixed on the basis of technical information.

On the other hand standards are set up for expenditures only and therefore for manufacturing departments standards are set for different elements of cost i.e., material, labor and overheads.

In standard costing the standards are set and an attempt is made to attain these standards. The emphasis is on achieving the standards. the emphasis is on achieving the standards.

Standard costs are based on the basis of standards set by the management.

Standard costing is related to the cost accounts.

Standard costing variances are calculated for different elements of cost i.e., material labor and overheads. In standard of costing variances are studied according to their causes.