Archive for January, 2012


Standard Cost: Which Costs To Use As A Standard?

There is no single answer to the question, “Which costs should we use as a standard?” If you are setting a standard solely for internal management decisions, the answer is very broad. Internally, management can use anything it wants that would contribute to effective management. However, if you are setting a standard that will be […]

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Standard Cost: Where To Use A Standard?

To answer the question of where to use a standard, it helps to look at examples outside our own situation, company, or industry. At times, we put ourselves inside a self-imposed box and stop thinking for ourselves. Let’s look at an example far from our current question.

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Standard Cost Versus Actual Cost: Which is Best?

Many consultants promoting their particular methodology take aim at standard cost. Standard costs seem to take the heat for “All that ails” modern business. However, standard cost has a role in management’s tool box. Not as the only tool for all situations but it is the right tool for the right jobs. So when should […]

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Standard Cost: Is the Tool to Blame for Its Use And Results?

You may have heard consultants blame standard costs for a wide variety of problems. Invariably, their proprietary program or methodology is the solution for these problems. But, do they really know what they’re talking about? Can a standard cost be the cause for so many problems? I think not. This is the first in a […]

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