Implication of the Standard Costing and Target Costing

Running head: ACCOUNTING
ACCOUNTING
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ACCOUNTING
Abstract
The report which is presented is related to the implication of the standard costing and target
costing with the help of two articles i.e. extension of the IFC standard costing in which the
cost has been estimated in China, this is for standard costing and for the explanation of target
costing, “Empirical Analysis of Chinese firms”. In this report, two articles have been
discussed critically and the system of this process of costing helps in the operational
management and also in growth of the organizations are discussed here. Lastly,
recommendations have been provided so that the organization can implement and have a
better growth rate.

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ACCOUNTING
Table of Contents
Introduction................................................................................................................................2
Use of Standard Costing in Planning and Control System........................................................2
Implementation of Standard Costing.........................................................................................4
Cost estimating and rendering by the IFC standard...................................................................6
Target costing method................................................................................................................6
Implementation of target Costing...............................................................................................7
Innovation of the Business model..............................................................................................8
Recommendations......................................................................................................................9
Process Costing......................................................................................................................9
Job Costing...........................................................................................................................10
Conclusion................................................................................................................................10
References................................................................................................................................11

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ACCOUNTING
Introduction
The report presents the planning and control system related to the standard costing
and target costing. The articles that has been selected of the standard costing is upon the
extension of the IFC standard costing in which the cost has been estimated in China. The
article does provide the information about the construction cost of BIM (Building
Information Modeling). For the target costing, the article that has been selected is on the
“Empirical Analysis of Chinese firms”. The article does provide information about the
innovation of business model and also performance of firms.
Use of Standard Costing in Planning and Control System
One of important tools of costing that has been used in various organizations at the
time of planning budget is standard costing. This costing process also helps in projection of
the expenses that the organization will make upon any project or any preparing ant budget.
The costs that are involved in the production process can be estimated and as per that the
production can be started (Eisenberg 2016). The standard costing has been done before the
starting of the project or budget. In determining the standards before the beginning of
accounting period, the cost that will be needed for the completion of project will be estimated
through this type of costing (Cooper 2017). Usually for the estimating cost of project and for
budgeting the standard costing can be recommended for any organization.
The objectives related to the standard costing are stated here:
 The process of standard costing helps in the evaluation of performance of organization.
 At the time of operation, it helps at the time of implementation of budgetary control.