Restrictions of standard costing

Question

Write down the restrictions of standard costing?

Answer 1

- Basically it is not easy to set up standard costing

- Recurrent amendment of standards is costly.

- Within the short period of time, standards become unbending.

- Set of standards makes disturbance amongst the employees because of the non accomplishment of the same. Therefore, sometimes it makes unfavorable effects.

- Every organization has dissimilar setting of parameters to set standards for themselves. Therefore, it might not be appropriate in all kinds of organizations.

- It will be not easy to appropriately inspect the discrepancy because of a variety of random factors.

-Management’s scarcity of interest in the standard costing creates it unproductive means of cost control.