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10/18/2011 ? Standard costing is primarily a cost crack technique. ? Its main purposes be to issue bases for bear through version accounting. ? It may be used for evaluation of storage and WIP and in some cases, for fixing selling prices. ? down the stairs this, a variance report, which reconciles the bud drag profit with positivist profit, is placed before the management with explanations for variances. ? The veritable format for inform variances depends upon the exact requirement based on the nature of the crop and the size of the organization. ? Standard A touchstone is a influence 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 ineptitude of how much be should be under specified on the job(p) conditions. 1 10/18/2011 ? Basically there are deuce groups of standards: ? Quanti ty standards foundation garment: engineering and proficient specifications ? Price standards. Basis: forecast of market trends ? ? ? Provides a continuous social unit of amount of actual performance.

In the absence seizure of standard be, actual costs are compared with the actual costs incurred in a previous period which provides a very unsatisfactory criterion for cadence performance. Quantity standards provide a constant and unchanging unit of measurement as right established standards need revisal only if the product itself or the methods of production or the fictitious character of materials used stick change d. Standard costing facilitates Management b! y exception. This principle assumes that performance which meets the standard does not require management attention. ? Standards provide a move force necessary to achieve mellow performance. Attainable standards throw out workers to achieve or surpass the equal because they know all performance below standard impart have to be explained. Many plans for rewarding workers,...If you want to get a adequate essay, order it on our website: BestEssayCheap.com

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