According to Arora (1995), cost control techniques aims at improving efficiently by controlling and reducing costs to the lowest profitable figure. If the selling price remains constant, the reduction of costs involved results in a greater profit. When the commodities produced are sold, cost control as a preventive function aims to prevent costs from exceeding the predetermined target. In order to et an adequate return on capital employed, its essential to aim at minimum cost and maximum quality bearing in mind the price charged (atty, 2000).
Horngren (2001), said that costing is carefully predetermining of standards costs, which are target costs that is cost should be attained. Standard costs are the building blocks of flexible budgetary and feedback system. These costs help to build budget gauge performance, save book keeping costs and obtain product costs. Pizzey (1999) said, standard costing is the name given to a technique where standard costs are predetermined and subsequently compared with the actual as recorded.
Owler (2004) said that standard costing is a method of ascertaining costs whereby statistics are prepared to show the standard costs, the actual costs, and the difference between these costs that is variance is there after calculated. Standard costing is a system of cost accounting which makes use of predetermined standard costs relating to each element of cost, that is, labour, material and overheads for each unit of product manufactured or service offered, (Batty 2000).
The Term Paper on Automatic Railway Gate Control
Aim of this project is to control the unmanned rail gate automatically using embedded platform. Today often we see news papers very often about the railway accidents happening at un- attended railway gates. Present project is designed to avoid such accidents if implemented in spirit. This project is developed in order to help the INDIAN RAILWAYS in making its present working system a better one, ...
Arora (1995) said that standard costing is simply the name given to a technique where by standard costs are computed and subsequently compared with actual costs to find out he difference between the two. He further defined it as a technique of cost accounting which compares standard costs of each product or service with the actual costs to determine the efficiency of the operations so that any remedial action may be taken immediately. Lucey (1996) defined standard costing as a technique which establishes predetermined estimates of the costs of the product and services and then compare the predetermined costs with actual as standard costs and the difference between the standard costs and actual costs is known as variance.
According to him, there are three types of standards that is, basic standards, ideal standards and attainable standards. Basic standards are long term standards which would remain unchanged over years. There sole role is to show trends over time for such items as material prices, labour rates and efficiency and the effect of changing method which is a standard established for use over a long period from which a current standard can be developed.
Ideal standards are standards which can be attained under the most favorable conditions with no allowance for normal losses, waste and machine breakdown also as a potential standard. Attainable standards are based on efficient operation conditions an attainable standards is one which can be attained if a standard unit of work carried out efficiently, a machine properly operated or material properly used, allowances are made for normal loses, wastes, and machine break times.
Standard costing has been traditionally considered a very useful technique in planning and control, product costing and performance evaluation (Sulaiman et al 2004).
According to Michelle (2005), standard costing provides a number of benefits in performance evaluation. Standard cost variables provide feedback information designed to help managers control operations in accord with the plans they have set. They highlight the difference between the planned costs of a period and actual costs incurred that time.
Since mid 1980s, standard costing has come under intense criticism, (Sulaiman 2005).
The Term Paper on Budgeting Importance
Abstract Beyond Budgeting has been proposed as an influential idea that will reinvigorate management accounting contribution in business operation and performance. It is claimed that the traditional system has lost relevance with the modern business environment and is no longer satisfying the needs of managers. Budgets have been ingrained in the culture of business since their inception in the ...
A number of researchers have reported that as a result of changing manufacturing environment, the applicability of standard costing and variance analysis is decreasing as a planning and control technique. Contrary to the above views, empirical evidence indicates that many companies are using standard costing for decision making product costing, planning and control and performance evaluation both in developed and developing countries, (Lyall & Grahan 1993: Joshi 2001) 2. Budgetary control Pandey (1995) went further to explain a budget as a comprehensive and consistent plan expressed in financial forms showing operations and resources of an outputs for some specific period in our future. Pandey also cited basic elements of a budget to include a comprehensive and consistent programme, expresses in financial terms, a plan for the firm’s operations, resources and future plan for a specific period. For Brench (1993) he defines a budget as a reflection of management intentions while it is referred to as quantified plan by Horrigen (1996).
Therefore a budget is a management technique used to control income and expenditures and indicates that performance expected of employees who may therefore be used to serve as an index for measuring of the level of profitability and fund utilization in the organization. Frank Wood (1999) said that budgets are drawn up for control purposes. The budget is used as a guide and not a straight jacket. The author added that budgets show the action that management is taking to influence future events.
