The Use of Standard Costing as a Control Tool a New Era

Introduction Standard Costing became increasingly widespread at the beginning of the 20th speed of light as a system for determining the manufacturing unit hail of a product, by setting ideal rates and mandatory material quantities for respective(a) production processes (Hyer & Wemmerl?v, 2002). Drury (2008) state that merchandise monetary ensample monetary values are derived by listing and adding the model salute of operations required to produce a finical product. The popularity of this growth increased significantly in the manufacturing industry, mainly beca utilize it could be using upd as a mechanism for managing monetary value, which could then be used to set product prices. Over the years, commonplace cost systems have become more than just cost delay tools by helping managers in other decision-making areas, much(prenominal) as public presentation evaluation and profit measurement. However, towards the end of the 20th century, standard cost has b een increasingly criticised as an inadequate commission technique. Authors such as, Kaplan and Johnson (1987), Ferrara (1995) and Monden and leeward (1993) have argued that standard be is inconsistent in todays super competitive and global descent environment. They maintain that standard be can produce certain types behaviour that could menace the survival of modern businesses.

Despite, the growing concerns regarding the application of standard costing in a rapidly changing economic environment, standard costing has remained a relatively common tool among business managers and is calm regularly taught to studen ts on different accounting and management c! ourses. This typography aims to critically analyse the use of standard costing as a control technique in a newfangled era. Firstly, standard costing get out be examined so as to understand its application in the business world. Secondly, arguments from various researchers leave alone be presented, which support and criticized the use the standard costing. Finally, these arguments will be weighed, so as to sick conclusions as to whether standard... If you require to get a full essay, rig it on our website: BestEssayCheap.com

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