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Accounting For Managers - Cost Estimation And Control-Standard Costing And Variance Analysis

Standard Costing Vs. Budgetary Control

   Posted On :  03.05.2018 11:44 pm

Standard costing and budgetary control are control techniques adopted in a firm with specific objectives. Following points of differences between the two can be observed:

Standard Costing Vs. Budgetary Control
 
 
Standard costing and budgetary control are control techniques adopted in a firm with specific objectives. Following points of differences between the two can be observed:
 
1.      Standard costing is a long range control activity developed and adopted with focus on production. Budgetary control is an activity concerned with every functional area of the firms and functional budgets are prepared to control that function in a shorter term.

2.      Standard costs are scientifically predetermined. Budgetary control is concerned with the overall profitability and financial position of the concern.

3.      Standard costing is concerned with ascertainment and control of costs. Budgetary control is concerned with the overall profitability and financial position of the concern.

4.      The emphasis of standard costing is on what should be the cost whereas in budgetary control the emphasis is on the level of costs not to be exceeded.

5.      Standards are determined for each element of cost. Budgets are determined for a specified period.

6.      Standard cost is a projection of cost accounts. Budget is a production of financial accounts. 

7.      Standard costing is concerned with the control of costs and is more intensive in scope. Budgetary control is concerned with the operation of business as a whole and is more extensive.
Tags : Accounting For Managers - Cost Estimation And Control-Standard Costing And Variance Analysis
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