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Give the advantages of Standard Costing:

Give the advantages of Standard Costing:

Answers

Martin
(i). Planning: is made easier by use of already set price and cost standards.

(ii). Managerial performance Evaluation is made easier and comprehensive by use of pre-defined
standards of cost and revenue.

(iii). For control purposes, standard costing enables variances to be detected where they occur and
corrective measures taken before it is too late.

(iv). It can be used for prediction purposes whereby future costs and revenues can be projected.

(v). It makes inventory valuations much easier.

(vi). When proper standards are set, then they provide motivation, as they are targets and
yardsticks for performance measurement.

(vii). Decision-making: Standard costing can be used to decide on what level of activity is
achievable within a given period of time given a certain resource constrain.
marto answered the question on February 26, 2019 at 09:46

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