STANDARD COSTING AND CONTROL BY VARIANCE ANALYSIS. A RESEARCH PROJECT MATERIAL ON ACCOUNTING
Standard costing and control by analysis of variance has been a very important mater in every manufacturing. The need for a through research and critical analysis of this issue form the basis and the aim of this job. To facilitate reading and understanding of this write up, the writer has categorized his work into chapters. Chapter one begins with the Background of the study, statement of the problem, purpose of the study, research objectives, different between research objectives and purpose of the study, scope and limitation of the study, significance of the study and definition of terms involved. In chapter two, we have review of related literature, types of standard, costs cites for setting standards, preliminaries in establishing a system of standard costs, variance, variance classification and favorable and unfavorable variances. Finally, chapter three deals with discussion of findings, conclusion and recommendation.
1.0 BACKGROUND OF THE STUDY
Unplanned actions cannot be controlled for control entail keeping performance in the form control is compelling actions it conform to plans. Planning and control of costs are useful for efficiency, productivity and profitability in an business organization. Cost plans come in many categories of which standard costing is involved.
Standard costing is a system of cost accounting which is designed to shoe in detail how much each product should cost to produce and sell when a business is operating at a stable level of efficiency and for a given volume of output. On the other hand, variance analysis is simply the explanation of the causes of deference between actual and preplanned or standard performance when an activity takes place.
1.1 STATEMENT OF PROBLEM
(A) Difficulties arise with too frequent revision of standards especially ion an inflationary period. This makes standards to lose their control and motivational effects.
(B) It may be time consuming and costly to apply and to maintain up to alate.
(D) Failure to take adequate immediate actions. On cost variance reported to the management destroys the proper objectives of standard costing.