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In this case, these costs are not assigned to a product. It therefore follows that amounts mirroring standard costs are what become identified first in regard to the cost of goods sold as well as inventories of a given manufacturer. In this case, it can also be noted that standard costing is regarded a rather important tool of management. Incase of any variance, the top leadership of the organization immediately becomes aware of the variation between planned/standard costs and manufacturing costs.
Conclusion
The information provided by cost accounting is critical when it comes to the effective management of an organization. Without such information, decision making would become an equivalent of operating in the dark for most businesses. For instance, firms would be rendered clueless in the determination of whether or not to continue the production of certain products. Cost accounting...
Thus as I have already pointed out in the introductory section, when it comes to the success of any given firm, the relevance of cost accounting cannot be overstated.
References
Brammertz, W., Akkizidis. L., Breymann, W., Entin, R. & Rustmann, M. (2009). Unified Financial Analysis: The Missing Links of Finance. West Sussex: John Wiley & Sons.
Drury, C. (2007). Management and Cost Accounting (7th ed.). London: Cengage Learning EMEA.
Needles, B.E., Powers, M. & Crosson, S.V. (2010). Principles of Accounting (11th ed.). Mason, OH: Cengage Learning.
Siegel, J.G. & Shim, J.K. (2000). Accounting Handbook (3rd ed.). New York: Barron's Educational Series.
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