Disadvantages Of Standard Costing.

Q70. What are the disadvantages of standard costing?


          What are the limitations of standard costing?
Ans. Disadvantages of standard costing are:

  1.  Standards may be either too strict or too liberal.
  2. Standards once fixed rarely hold goods for a long period, they require revision.
  3.  It requires good organization and cooperation from all levels.
  4.  In view of the uncertain economic situation and great fluctuations in prices, sometimes it comes extremely difficult to set up standard cost.

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