What are the main purposes of standard costing

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Reference no: EM131627984

MODULE TITLE: BUSINESS MANAGEMENT TECHNIQUES

TOPIC TITLE: COSTING TECHNIQUES

LESSON 6: STANDARD COSTING

INTRODUCTION - In this lesson we introduce the concept of standard costing and the different types of standard that can be used. We then discuss the application of the technique and provide practical examples in the next lesson.

YOUR AIMS - At the end of this lesson you should be able to:

define a standard cost
explain the need for standard costing
describe the different types of standards and their respective advantages and disadvantages
understand how standard costs are set
appreciate the need to revise standards
list the advantages and disadvantages of the standard costing system.

QUESTIONS -

1. What is a standard cost?

2. What are the main purposes of standard costing?

3. Of what use is a basic standard?

4. What is meant by the term a 'standard hour'?

5. Why must standards/targets be realistic?

Reference no: EM131627984

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