Session BStandard costing
You know that it is useful to control costs. But how do you know you are controlling the right ones? And by how much should you reduce them, if possible? You can switch lights off and turn down the heating, but your work team are unlikely to work well in the cold and dark.
It helps you to control anything – the output of a machine or a work team, for instance – if there is a standard against which to measure performance.
In cost control, the first step is to decide what the costs should be and then control what happens in such a way that you meet those ‘target’ costs. If actual costs of the operation ...