ACCOUNTING FOR

MANGERS
PRESENTATION ON
IMPORTANC OF STANDARD COSTING

V.PRABHU
17PA1E0056
STANDARD COSTING
● The standard Cost is a predetermined cost which is
calculated from management standard of efficient
operation and relevant necessary expenditur. - C.I.M.A
IMPORTANCE OF STANDARD COSTING
 MEASURING EFFICIENCY

 FORMULATION OF PRODUCTION AND PRICE POLICY

 DETERMINATION OF VARIANCE

 REDUCTION OF WORK

 MANAGEMENT BY EXCEPTION

 FACILITIES COST CONTROL

 HELPFUL IN TAKING DECISIONS

1.MEASURING EFFICIENCY

Standard costing is a yardstick of measuring efficiency

2.FORMULATION OF PRODUCTIONS AND PRICE POLICY

standard costing is helpful in formulating policies

3.DETERMINATION OF VARIANCE

By comparing actual costs with standard costs variances

are Determined management is able to spot out the place of
inefficiencies.
4.REDUCTION OF WORK

In historical costing records are maintained for determining

the costs. Standard costing reduced the critical work

5.MNAGEMENT BY EXCEPTION

These means everybody is given target to be achieved and

management need not supervise each and everything

6.FACILLIATS COST CONTROL

Every costing system aims at cost control and cost reduction.

Standard costing helps in achieving these aims
7.HELPFUL IN TAKING IMPORTANT DECISIONS

Standard costing provides useful information to the

management

THANK YOU...