Asked by silvana cuadros salas on May 27, 2024
Verified
One of the main criticisms of standard costing systems is that it tends to focus too heavily on cost minimisation.
Standard Costing Systems
Accounting methods that use standard costs for direct materials, labor, and overhead to assess the efficiency of operations.
Cost Minimisation
A business strategy aimed at reducing expenses to improve profitability without compromising on the quality of the products or services offered.
- Grasp the theoretical underpinnings and criticisms of standard costing systems and flexible budgets.
Verified Answer
GL
Gladys LesterMay 30, 2024
Final Answer :
True
Explanation :
Standard costing systems place significant emphasis on cost minimisation, often at the expense of other important factors such as quality and customer satisfaction. This can lead to a narrow focus on short-term financial performance and the use of cost-cutting measures that may negatively impact the long-term viability of the business.
Learning Objectives
- Grasp the theoretical underpinnings and criticisms of standard costing systems and flexible budgets.
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