Question

TASK 1 - 4.1 Analyse standard costing techniques
State and analyse any three (3) features of standard costing techniques
a)   ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
b)   ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
c)   ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Answer 1

1. Cost Determination:

You can find out cost of the product based on the previous experience. Normaly standard costing is preparing based on our previous years data. So you will get some idea about the cost of your product based on your previous data.

2.Cost Comparison: You can compare the cost of your actual costing with that of standard costing. With this data you can improve the area where you are lacking which leads to cost reduction.

3. Control Variances: You an find out the variance of each area. If it is rate, quantity or output, you will come to know which you need to improve. If it is rate variance as unfavourable, you need to improve a better rate, and unfavourable quantity, you need to improve production like that.