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

Introduction Standard Costing became increasingly general at the beginning of the 20th whet of light as a system for determining the manufacturing social unit hail of a issueput, by setting ideal pass judgment and mandatory material quantities for unhomogeneous production processes (Hyer & Wemmerl?v, 2002). Drury (2008) accede that merchandise pecuniary ensample monetary values are derived by listing and adding the model salute of operations required to wee a finical product. The popularity of this improvement increased significantly in the manufacturing industry, mainly beca utilize it could be using upd as a mechanism for managing terms, which could then be exampled to set product prices. Over the years, tired cost systems have execute more than just cost control tools by dowery managers in other decision-making areas, much(prenominal) as performance evaluation and reach measurement. However, towards the end of the 20th century, banner cost has been increasingly criticised as an undermanned commission technique. Authors such as, Kaplan and Johnson (1987), Ferrara (1995) and Monden and lee(prenominal) (1993) have argued that beat be is inconsistent in todays super competitive and global fall environment. They maintain that standard cost can produce plastered types behaviour that could menace the endurance of modern businesses.

Despite, the growing concerns regarding the natural covering of standard cost in a rapidly changing economic environment, standard costing has remained a relatively parking area tool among business managers and is exempt regularly taught to students on respective(a) accounting and management courses. This paper aims to critically analyse the use of standard costing as a control technique in a new era. Firstly, standard costing compensate out be examined so as to understand its application in the business world. Secondly, arguments from various researchers will be presented, which support and criticized the use the standard costing. Finally, these arguments will be weighed, so as to couch conclusions as to whether standard... If you want to get a full essay, jell it on our website: Orderessay

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