BABLU KUMAR TIWARI

13305017064

BBA – 601

FINANCIAL MANAGEMENT III

BBA(H) – 6th Sem

 STATE THE POINTS OF SIMILARITIES AND DIFFERENCES BETWEEN
STANDARD COSTING AND BUDGETARY CONTROL

 What is Standard Costing?

Standard Costing is a method used to compare revenue and the

standard cost with the actual result, to check the variance and its
causes. It informs the management of the deflection and initiates
correct measures for improvement.

 What is Budgetary Control?

Budgeting Control is a management operation that monitors the

budget, control cost, and service in a given accounting year. It
helps the management to set a regulate performance and
financial goal and helps the company get the desired results. It’s
a procedure, in which company functions are outlined in advance,
and compared with the real result later to see if the desired
results are acquired or not.

DIFFERENCES:-
 Basis Standard Costing Budgetary Control

Meaning It is a method used to It is a management function that

compare revenue and the monitors budget, control cost, and
standard cost with the actual operation in a given accounting year
result

Scope It limited to cost details. Includes cost, financial data.

Scale Narrow Wide

Variance Yes No

Compariso Actual costs and standard Actual figures and budgeted figures
n cost of actual output

SIMILARITIES:-

Standard Costing Budgeting Cost

Predetermin Standard costs are Budget costs are

 predetermined
ed costs fixed also estimated
cost according to costs.
estimates.

Standard costs are These costs are

estimated in also estimated in
Advance
advance, these are advance and these
cost
compared are compared to
to actual costs. actual costs.

Budgeting costs
Standard cost is also aim at cost
Both aim at designed to control control and assure
cost control costs and bring addition in
efficiency. employee’s
efficiency.

Standard costs are

These advance
designed well in
Cost estimated costs
advance and
comparison and compared to
compared to actual
actual costs.
costs.

Standard costs are Budgetary costs are

periodically also reported to
Reporting
reported to top management
management periodically.

Standard cost lays

Budgetary control
stress on check of
Corrective lays stress on
adverse variation
action check of adverse
and effort is made
variances.
for correction.