Cost Management in Real Estate

Running head: Managerial Accounting
Managerial Accounting
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Managerial Accounting1
Abstract
The assignment focuses on critically understanding the concept of standard costing and
target costing. With increase in technological advances and globalization companies
have been using different types of methods instead of calculating standard costing and
target costing. Therefore, he paper tries to reflect the significance and relevance of
standard costing and target costing in the modern day companies. This will be
supported by analyzing two journal articles. At last a relevant conclusion is drawn after
analyzing the two papers.

Managerial Accounting2
Table of Contents
Introduction........................................................................................................................2
Discussion..........................................................................................................................2
Standard Costing System Features...............................................................................2
Relevance of Standard Costing with the Study.............................................................3
Comparison between Target Costing and Standard Costing........................................4
Relevance of Target Costing.........................................................................................5
Conclusion.........................................................................................................................6
Reference..........................................................................................................................8

Managerial Accounting3
Introduction
The current assignment focuses on describing the concept of costing system and
to evaluate and analyze the significance of the costing system. This system is basically
followed by a business in order to ensure that the cost structure developed for the
business is accurate. The prices set by the business is according to the overall costs of
the operations. In order to analyze the costing system, target costing and standard
costing is applied. This is done so as to find out that the same concept could be applied
for the operations of the business. The positive aspects which is linked with the above
mentioned techniques used for the business is reflected during the analysis. Moreover,
the paper will be highlighting the application and usage of the costing techniques for a
reputed company in order to precisely understand the techniques. The paper also aims
at reflecting a precise comparison between standard costing and target costing and the
various advantages which are associated with the techniques. At last the paper suggest
a relevant conclusion which will be drawn from the analysis.
Discussion
Standard Costing System Features
The Standard Costing is the basic concept in traditional accounting system which
enables to identify the variances between the cost that must be incurred and the actual
cost for the produced goods. It is basically an alternative for traditional cost accounting.
In simple words the cost which should have incurred for an operation of production for
the actual good is termed as the standard cost (Black, 2017). The standard costing is
referred as the pre-determined cost which have a connection with the expected cost,
master budget and cost budget. While manufacturing of goods, the cost associated with
the goods is from the direct materials, manufacturing overhead and direct labor. In
addition to this the total cost also includes fixed overheads which are directly related to
the activity.
The standard costing is an effective accounting tool. It can be estimated that the
cost of the goods are accurate by checking the variances. When there is a variance
then the management of the company alerts that there is a difference between the
standard cost and manufacturing cost (Segeth-Boniecka, 2017). When the actual cost is
comparably more than the standard cost then it is considered that the variances are
quiet unfavorable. When there is unfavorable condition or variance it indicates that the
profit might be less what is expected by the company and thus the management will
have to take certain steps to neutralize the variances observed. In the same way when
the estimated cost by the company is found to be less than the actual cost the condition
for production of more goods becomes favorable. In this condition the management can
earn more profit than what is estimated by the company. This planning helps the
organization to earn revenue and enhance profitability.
The Standard Costing enables the management to keep check on the overall
expenses and cost of the operations and productions. This tools helps to manage the