Standard costing system, Cost Accounting

Assignment Help:

Standard costing System has the following main advantages or benefits:

1. The process in itself often discloses inefficiencies, because the setting of standards requires a thorough analysis of all cost functions.

2. The process of setting standards forces management to plan efficient and economical operations.

3. Standard costs establish clearly defined lines of cost responsibility and authority.

4. Standard costs are likely to be an important aid to management in obtaining acceptable job performance by providing a clear idea as to what constitutes acceptable performance.

5. Variances between actual performance and standard costs facilitate control through the application of the principle of exception.

6. Faster reporting of operating data is possible; the shortened time between action and the availability of control information helps management to prevent the development of unfavorable cost trends.


Related Discussions:- Standard costing system

Advantage and disadvantages of zero based budgeting, Advantage and Disadvan...

Advantage and Disadvantages of Zero Based Budgeting Advantages 1. Resources allocation is more efficient. 2. Focus attention on values for money and makes clear relat

Break-even chart, Break-Even Chart This is a diagrammatic presentation...

Break-Even Chart This is a diagrammatic presentation of the relationship among costs, prices, expenses and the sales volume. A break-even chart expresses revenue and expens

Standard costing, Standard Costing A standard cost is a predetermined ...

Standard Costing A standard cost is a predetermined calculation of how much is supposed to be incurred under specific particular working conditions. It is not an average of pa

Estimate the conversion value- stock price volatility, (a)  (i) Conversi...

(a)  (i) Conversion Value Conversion Value = Conversion Ratio * Stock Price                 = 22*$40 = $880 (ii) Market Conversion Price Market Conversion Price =

Advantages and disadvantages of group bonus plan, Advantages and Disadvanta...

Advantages and Disadvantages of Group Bonus Plan Benefits associated along with group bonus schemes involve i. It encourages teamwork and cooperation among workers ii.

Effects of increasing fixed cost, Jones Company operates within a monopolis...

Jones Company operates within a monopolistically competitive industry. The estimated demand for its products is given by the following inverse demand function P = 1760 - 12Q

Evaluate equivalent annual cost, An industrial drill costs $60.000 to purch...

An industrial drill costs $60.000 to purchase and $10,000 to install seven years ago. The market value now is $33.000 and this will decline by 12% of current value each year for th

Importance of cost classification, Importance of Cost Classification A...

Importance of Cost Classification Analysis of cost behaviour is significant to all organizations for effective management. It is since many organizations have a unique cost st

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