Q70. What are the disadvantages of standard costing?
What are the limitations of standard costing?
Ans. Disadvantages of standard costing are:
- Standards may be either too strict or too liberal.
- Standards once fixed rarely hold goods for a long period, they require revision.
- It requires good organization and cooperation from all levels.
- In view of the uncertain economic situation and great fluctuations in prices, sometimes it comes extremely difficult to set up standard cost.