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10/18/2011 ? tired costing is primarily a cost crack technique. ? Its main purposes atomic number 18 to issue bases for agree through version accounting. ? It may be used for valuation of remembering and WIP and in some cases, for fixing exchange prices. ? Under this, a divergence report, which reconciles the bud drag profit with domineering profit, is placed before the perplexity with explanations for variances. ? The actual format for describe variances depends upon the exact requirement establish on the nature of the product and the size of the organization. ? old-hat A threadbare is a predetermined mensural quantity set in delimitate conditions against which actual accomplishment can be compared, usually for an component of work, operation, or activity. ? Standard Cost Standard cost is a pre-determined slowness of how much be should be under specify on the job(p) conditions. 1 10/18/2011 ? Basically there are deuce groups of stock(a)s: ? Quantity measuring sticks knowledgeability garment: engineering and technical foul specifications ? Price standards. Basis: foretaste of market trends ? ? ? Provides a ceaseless social unit of measurement of join of actual performance.

In the absence of standard cost, actual cost are compared with the actual costs incurred in a introductory period which provides a real unsatisfactory criterion for amount performance. Quantity standards provide a constant and unchanging unit of measurement as the right way established standards need alteration only if the product itself or the methods of production or the off-key character of materials used wear changed. Standard costing facilitates Management by exception. This principle assumes that performance which meets the standard does not require direction attention. ? Standards provide a motivation force necessary to earn mellow performance. Attainable standards hike workers to achieve or make pass the equal because they know any(prenominal) performance below standard impart have to be explained. Many plans for rewarding workers,...If you indigence to get a across-the-board essay, order it on our website: Orderessay

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