Steps For Introducing Of Standard Costing System.

Q72. What are the steps for introducing of standard costing system?
Ans. Steps are:

  1. Study of the technical aspects of the factory viz. Production method, technique, wastage etc.
  2. Review of existing costing system, records and forms.
  3.  Study of organization chart, authority responsibility relationship etc.
  4. Choices of standard to be made viz. basic or current.
  5. Secure cooperation of the factory executives for fixing the quality and efficiency standards.
  6. Study of existing cost policies with regard to the methods of allocation and apportionment of overhead.
  7. Review of budgetary control and internal control procedure.
  8. Preparation of detailed manual with regard to standard for the guidance of the staff.
  9.  Provide training to staff so they properly work as per system.

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