Standard costing is quite useful to the management in its function say planning, controlling etc and most important in decision making and performance evaluation. Standard costing can be used for:
- Projecting the profit level of the business at any level of production.
- To help in execution of management’s functioned effectively i.e. planning and controlling of cost.
- To analyze the impact of cost if sales volume increase/decrease by certain percentage.
- To measure the efficiency of production.
- To measure the performance of each segment.
- To identify and measurement of variances between standards and actuals.
- To design performance measurement systems to encourage employees to participate for the betterment of the Organization.
