Advantages of standard costing, Cost Accounting

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ADVANTAGES OF STANDARD COSTING

1.     It offers a yardstick for measurement of performance.

2.     It helps 'Management by Exception'.

3.     It allows the management to focus more on those activities and expenses, which indicate high favorable or adverse variances, that saving lot of time and expense.

4.     It offers motivation for achieving high performance.

5.     It offers an opportunity for continuous re-appraisal of the methods of production, use of material, production design, etc, leading to cost reduction and establishing new standards.

6.     It is economical and easier to operate.

7.     It can be used as an aid to budgeting.

8.     It removes wastages by detecting variances and suggesting corrective measures for them.


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