Standard costing - Disadvantages Flashcards
1
Q
What are the disadvantages of standard costing?
A
Changing prices of resources
Incorrect decisions
2
Q
Changing prices of resources
A
The cost of some resources, especially materials, but also labour and overheads can change, which means standard cost may be inaccurate
3
Q
Incorrect decisions
A
Inaccurate standard costs can result in inappropriate selling prices and other incorrect decisions
4
Q
What does standard costing mean?
A
It means calculating budgeted costs for materials, labour and overheads before production takes place.
