Managerial Accounting And Business Performance

Running Head: MANAGERIAL ACCOUNTING
MANAGERIAL ACCOUNTING
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MANAGERIAL ACCOUNTING
Abstract
The main purpose of this report is to identify the different method of costing, which
can help a manager in efficient decision-making. The study is supported by analyzing the
journal article of both the costing techniques. It is found that, both the costing methods is
helpful in increasing the business performance. Target costing technique is best for planning
purpose and standard costing technique is best system for controlling the cost of the business
operations.

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MANAGERIAL ACCOUNTING
Table of Contents
Introduction................................................................................................................................3
Discussions.................................................................................................................................3
Features of Standard Costing.................................................................................................3
Relevance of Standard Costing..............................................................................................5
Comparison of target costing with Standard Costing............................................................7
Relevance of Target Costing..................................................................................................8
Recommendations................................................................................................................11
Conclusion................................................................................................................................11
References................................................................................................................................13

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MANAGERIAL ACCOUNTING
Introduction
Costing system is very important framework in an accounting system and is used to
estimate the costs of a product. This system is used for analyzing the profitability of the
business. The paper has discussed on the concept of costing techniques that are used by
organizations. It will highlight the importance of standard costing and target costing in the
business environment. The paper is related to journal article of standard costing and target
costing. The positive aspects of standard costing and target costing are discussed in this
paper. The main objective is this report is to identify the best method of costing techniques
that can help the manager in efficient decision-making.
Discussions
Features of Standard Costing
Standard costing is a practice of accounting that is used to substitute the expected cost
from the actual cost of the goods. This is a traditional system of accounting. This system will
identify the variance differences between the actual costs of the goods and the expected costs
of the goods. This is a simplified approach relative to other costing system like LIFO and
FIFO methods (Tsai, Lan and Huang 2019). This is because, in LIFO and FIFO methods,
historical information related to the goods are noted for calculating the cost of the inventories
or stock. Standard costing system is used to calculate the estimation cost for all the activities
of a business. This system of costing uses several of applications to find the cost of the goods.
The application of standard costing helps in budgeting the expected cost with its
expected costs. This predetermines the cost of manufacturing of the specific products in that