Question

Give examples of the strengths and weaknesses inherent in the use of standards for planning, control and decision making. How do standards relate to general cost management?

Note:Could you please don't use your handwriting to answer this question to be easy for me to solve...Thanks

Answer 1

Standard Costing – Advantages and Disadvantages:

There are numerous favorable circumstances and hindrances of control frameworks in business the board. These control frameworks ought to be altogether analyzed and connected so as to be a fruitful administrator and have a business run easily. The sorts of control frameworks are bureaucratic control, advertise control, and faction control.

There are focal points and disservices to utilizing a standard costing framework. The essential focal points to utilizing a standard costing framework are that it very well may be utilized for item costing, for controlling expenses, and for basic leadership purposes.

The disservices incorporate that executing a standard costing framework can be tedious, work concentrated, and costly. Additionally, the guidelines regularly must be refreshed if the cost structure of the generation procedure changes.

Strengths and weaknesses of Standard costing for Planning controlling and decision making.
Strengths ;

Standard costing is a superb device for planning and arranging. The expense of products and working cost portions can be built great with the assistance of standard costing approach.

Standard costing consolidate industry benchmarks into the cost structure , so the organization dependably search for greatness in cost administration.

It is exceptionally simple and valuable to think about real expense and standard expense and the board basic leadership ends up target and exact in territories like productvise productivity , proceed or discontinue with product offering , improvement openings in item cost structure and so forth.

On the off chance that there is any adjustment in item highlight or measures or amounts , the standard costing and the financial backing can be refreshed very effectively.

Weaknesses;

At the point when there are a no.of items and the real item blend changes from planned blend, it is hard to contrast planned monetary and actual.

Measures utilizing indutrial benchmark just may not be helpful for a specific organization having dieffererent working conditions and may prompt disappointment.

Norms created on the parameters of an organization may join numerous slacks making the gauges simple to accomplish and the execution may look great regardless of whether it is a normal execution.

Gauges need refresh when there is high swelling or when the buy cost changes quickly because of unexpected components.

On the off chance that overheads are not determined propoerly , there might be wide scope of under or over use of overheads that needs modifications and cost of stock will be mutilated.