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10/18/2011 ? Standard costing is primarily a cost crack technique. ? Its main purposes be to issue bases for tick off through version accounting. ? It may be used for military rank of storage and WIP and in some cases, for fixing selling prices. ? nether this, a variance report, which reconciles the bud drag profit with overconfident profit, is placed before the management with explanations for variances. ? The unfeigned format for describe variances depends upon the exact requirement based on the nature of the increase and the size of the organization. ? Standard A model is a predetermined measurable quantity set in delimitate conditions against which actual performance can be compared, usually for an component of work, operation, or activity. ? Standard Cost Standard cost is a pre-determined retardation of how much be should be under specified on the job(p) conditions. 1 10/18/2011 ? Basically there are deuce groups of standards: ? Quantity standards foundation garment: engineering and practiced specifications ? Price standards. Basis: forecast of market trends ? ? ? Provides a eonian social unit of amount of actual performance.

In the absence of standard cost, actual costs are compared with the actual costs incurred in a previous period which provides a rattling unsatisfactory criterion for cadence performance. Quantity standards provide a constant and unchanging unit of measurement as in good order established standards need revisal only if the product itself or the methods of production or the fictitious character of materia ls used permit changed. Standard costing fa! cilitates Management by exception. This principle assumes that performance which meets the standard does not require management attention. ? Standards provide a incite force necessary to achieve mellow performance. Attainable standards advocate workers to achieve or surpass the equal because they know any performance below standard impart have to be explained. Many plans for rewarding workers,...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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