Managerial Aspect Of Standard And Target Costing

Running head: COSTING IN MANAGEMENT
COSTING IN MANAGEMENT
NAME OF THE STUDENT
NAME OF THE UNIVERSITY
AUTHOR NOTE

1
Costing in Management
Abstract
This paper deals with managerial aspect of standard and target costing. It will further
elaborate the benefits of the standard costing and the target costing. Discuss the differences
they have. Two articles has been taken for the said purposes and along with that the following
questions will be entertained in the format.

2
Costing in Management
Table of Contents
Abstract......................................................................................................................................1
Introduction................................................................................................................................3
Answer to the Question 1...........................................................................................................3
Standard Costing....................................................................................................................3
Answer to the Question 2...........................................................................................................5
Answer to the Question 3...........................................................................................................6
Target costing.........................................................................................................................6
Standard And Target Costing.................................................................................................7
Answer to the Question 4...........................................................................................................8
Answer to the Question 5...........................................................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................12

3
Costing in Management
Introduction
The study focusses on the aspect of managerial accounting. Standard costing and
target costing will be the topic to discuss with respect to the articles selected. Standard
costing is the system in accounting which identify the variances among the cost that was
supposed to be incurred and the cost that has already occurred. It helps in ascertaining the
difference in order to take necessary measures. However, target costing depend on the cost
that are predetermined and therefore it is planned before the conception of the product and
during each and every cycle of the product till it gets manufactured, therefore, it can be said
that in the target costing the profit is kept into mind while calculating the cost of the products
and it can be identified and changed accordingly in different cycles.
Answer to the Question 1
Standard Costing
When calculating the cost for the manufacturing of goods the direct labor, direct
material, and manufacturing overhead are considered, which is the budget for the fixed
overhead and they also consider the fixed and variable cost as per the methods of standard
costing(Kianian, Kurdve and Andersson 2019). Standard costing is therefore the system of
accounts that helps in identifying the variances between the cost that have incurred for the
production of certain goods and the cost that was supposed to be incurred for the production
of such goods (Tsai, Lan and Huang 2019. Basically it is a mere differentiation of the actual
cost from the cost that was predicted. However, the cost that should have incurred for the
production of the actual goods is considered to be the standard cost. Standard costing is the
predicted cost, which supposedly have a link or integration with the expected cost, or with the
budget.