Question

Thinking of the Middle East, identify where you encounter products, services, or food items that should be relatively uniform and are based on standard inputs or costs. Identify the items, their standard components, and what the standards would probably be for each item. For example, the standard direct materials for a hamburger at a fast food restaurant might include a bun, a hamburger patty, one teaspoon of ketchup, one teaspoon of mustard, two pickles and one piece of paper for wrapping. The standard direct labor input might be 30 seconds per hamburger. Do you think it is beneficial for companies to assign standards, or does it create unreasonable pressure on employees to comply with the standards? What should managers do if they see that employees are not meeting the direct material or direct labor standards? What do you see as the pros and cons of having standards?

Answer 1

Standard costing is an important topic in accounting because it is refer to practice replace of expected cost to the actual cost . Simply it is recording the differences between the expected and actual cost .

Standard cost considered as an alternative to the LIFO method and LIFO methods is a cost layering system . Standard cost enhance the efficiency of the work .

Standard cost is an important topic and it is used at the manufacturing and food service for example the use of standard cost at the manufacturing the cost of product include the cost of labor who's is involved in manufacturing the product if the material cost is $ 30 and the labor cost is $60 and the overhead cost is 40$ the standard cost per unit will be $130.

Standard cost at food technology has components one of them is food technology term . standard cost helped to save time and money with the high quality .

Starbucks another example of industries who has been using standard cost . Starbucks uses standard costing to control the cost of beans in it is roasting operation (Jiambalvo ,2009). After roasting the beans lose weight because of losing water so the company use standard cost by setting the standard of the weight loss and then compare it with the actual loss.