The document provides an overview of standard costing in cost accounting, including its definition, objectives, types, advantages, and limitations. Standard costing serves various purposes like performance assessment, cost control, and budgeting while distinguishing between current, basic, ideal, and attainable standards. It emphasizes the benefits, such as increased profits and productivity, while noting challenges like the need for technical skills and potential variance issues.

1. Siilas campus
Presentation-
Cost Accounting
Standard Costing
Submitted to- Presented by-
Harish Sir Vinay kumar verma
BBA- 3rd Sem (Sec –A)

2. INDEX
• Definition
• Objective of Standard Costing
• Characteristics of Standard Costing
• Types of Standard Costing
• Advantage of Standard Costing
• Limitation of Standard Costing
• Short tricks to remember Formulas

3. Definition
 Standard cost is the pre-determined cost based on the
technical estimates for materials, labor and overhead for
a selected period of time for a prescribed set of working
conditions.

4. Objectives of Standard Costing
 To provide a formal basis for assessing performance and
efficiency.
 To control Costs by establishing standards and analysis of
variances
 To assist in setting budgets.
 To motivate staff and management.
 To provide a basis for estimating.
 To provide guidance on possible ways of improving
performance.

5. Characteristics of Standard Costing
Fixing Standard
Computation of Actual cost and Sales
Analysis of variance
Fixing Responsibility
Revision of Standard

6. Types of Standards
 Current Standard-
Current Standard is a Standard established for use over a
short period of time, related to current conditions.
 Basic Standard-
Basic Standard is a Standard established for use over a long
period of time from which a Current Standard can be
developed.

7.  Ideal Standard -
It is the Standard that can be attained under most favorable
conditions. No provision is made for shrinkage, spoilage or
machine breakdown etc.
Ideal Standards are not generally used because it may
influence employee motivation adversely.
 Attainable Standard -
It is a standard which can be attained if a standard unit of work
is carried out efficiently, on a machine properly utilized or
material properly used.

8. Advantage of Standard Costing
 Increase in Profit
 Increase In Productivity
 Economical
 Help in cost Control
 Full use of capacity
 Help in valuation of stock

9. Limitation of Standard Costing
 High degree of technical skill.
 Segregation of variances into controllable and
noncontrollable factors
 Duplication in recording,
 Either too strict or too liberal.

10. Short Tricks to remember Formulas