Q72. What are the steps for introducing of standard costing system?
Ans. Steps are:
- Study of the technical aspects of the factory viz. Production method, technique, wastage etc.
- Review of existing costing system, records and forms.
- Study of organization chart, authority responsibility relationship etc.
- Choices of standard to be made viz. basic or current.
- Secure cooperation of the factory executives for fixing the quality and efficiency standards.
- Study of existing cost policies with regard to the methods of allocation and apportionment of overhead.
- Review of budgetary control and internal control procedure.
- Preparation of detailed manual with regard to standard for the guidance of the staff.
- Provide training to staff so they properly work as per system.