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Decisions, Decisions, Decisions
THE CURRENT STATE: STANDARD
COSTING AND DECISION MAKING
Standard costing information is still a major source of nancial informa-
tion used to understand the nancial impact of business decisions. Since
most manufacturing companies use standard costing systems to value
inventory, the cost of each product is readily available. Most traditional
manufacturing companies consider a product cost accurate. But what is
odd is that a great deal of eort is made to ensure this “accuracy”: keep-
ing run rates up to date, allocating all production costs, and continuously
monitoring actual costs against standard. is leads ...