Standard Costing, Variance Analysis and Decision-Making

Business & Finance, Accounting
Cover of the book Standard Costing, Variance Analysis and Decision-Making by Alexander Berger, GRIN Publishing
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Alexander Berger ISBN: 9783640956289
Publisher: GRIN Publishing Publication: July 12, 2011
Imprint: GRIN Publishing Language: English
Author: Alexander Berger
ISBN: 9783640956289
Publisher: GRIN Publishing
Publication: July 12, 2011
Imprint: GRIN Publishing
Language: English

Research Paper (undergraduate) from the year 2011 in the subject Business economics - Accounting and Taxes, grade: 63%, University of Sunderland, course: Management Accounting and Control, language: English, abstract: This report is divided into two parts. The first part will explain how a standard costing system works and how a variance analysis is used properly. Furthermore, the statement 'Standard Costing and Variance Analysis are appropriate to any type and size of organisation' will be critically evaluated. The second part determines factors, which must be considered in the decision-making process. In addition, four scenarios of decisions will be provided and analysed. One of the main objectives of an organisation is to minimise the cost of production and to control the costs as they are limited resources within a business (Gupta, 2010). Management accounting literature provides several tools in order to achieve these objectives. In this context, the system for collecting and reporting revenue and cost information by areas of responsibility is called responsibility accounting (Siegel & Shim, 2006). It is based on the assumption that managers should be held responsible for their performance. A well-designed responsibility accounting system integrates responsibility centers within the organisation. In addition, responsibility centers are units within the organization, which have control over costs and revenues (Siegel & Shim, 2006). There are different types of responsibility centers such as profit centers, investment centers, revenue centers and cost centers. In the following report, the focus is on cost centers. Here, a variance analysis based on standard costing is a performance measure of a cost center (Siegel & Shim, 2006). In addition, a standard costing system is a useful tool facilitating decision-making.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Research Paper (undergraduate) from the year 2011 in the subject Business economics - Accounting and Taxes, grade: 63%, University of Sunderland, course: Management Accounting and Control, language: English, abstract: This report is divided into two parts. The first part will explain how a standard costing system works and how a variance analysis is used properly. Furthermore, the statement 'Standard Costing and Variance Analysis are appropriate to any type and size of organisation' will be critically evaluated. The second part determines factors, which must be considered in the decision-making process. In addition, four scenarios of decisions will be provided and analysed. One of the main objectives of an organisation is to minimise the cost of production and to control the costs as they are limited resources within a business (Gupta, 2010). Management accounting literature provides several tools in order to achieve these objectives. In this context, the system for collecting and reporting revenue and cost information by areas of responsibility is called responsibility accounting (Siegel & Shim, 2006). It is based on the assumption that managers should be held responsible for their performance. A well-designed responsibility accounting system integrates responsibility centers within the organisation. In addition, responsibility centers are units within the organization, which have control over costs and revenues (Siegel & Shim, 2006). There are different types of responsibility centers such as profit centers, investment centers, revenue centers and cost centers. In the following report, the focus is on cost centers. Here, a variance analysis based on standard costing is a performance measure of a cost center (Siegel & Shim, 2006). In addition, a standard costing system is a useful tool facilitating decision-making.

More books from GRIN Publishing

Cover of the book The New Legal Framework for Car Distribution by Alexander Berger
Cover of the book A narrow boundary and a narrow understanding of morality by Alexander Berger
Cover of the book A story of ethics - how sex creates order by Alexander Berger
Cover of the book Etablierung und Evaluierung neuer Konzepte zur Optimierung der Radiojodtherapie by Alexander Berger
Cover of the book Aspects of the English language in South Africa - focusing on language identity and language varieties by Alexander Berger
Cover of the book Analysis of Dell's Business Strategy by Alexander Berger
Cover of the book Tonganische Migranten in den USA by Alexander Berger
Cover of the book Möglichkeiten der Qualitätsprüfung im ambulanten Sozialen Dienst der Justiz by Alexander Berger
Cover of the book User Guide for Trainee Network Administrators - DHCP, WINS, IIS, Proxy by Alexander Berger
Cover of the book Analysing the marketing in christmas time by Alexander Berger
Cover of the book Internet Chat Communication by Alexander Berger
Cover of the book Digital Life by Alexander Berger
Cover of the book The Development of Theatre in Uganda by Alexander Berger
Cover of the book Writing against the odds - the South's cultural and literary struggle against progress and modernity by Alexander Berger
Cover of the book Reading Log of 'The Fault in Our Stars' by John Green by Alexander Berger
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy