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Basic Knowledge Of Accounting: Standard Cost Center

2011/1/13 11:47:00 39

The condition for establishing standard cost centers is that the products that the enterprises are going to produce are already in the category.

Determine

It can be measured in quantity and the amount of input required to produce each unit of production is known.

For any repetitive operation, the standard cost center can be established as long as the actual quantity of the product can be measured and the production function that is desired between input and output can be explained.

Generally speaking, the relationship between the main cost (direct raw material and direct labor) consumed by the manufacturing sector and the output is usually clearer, while the cost and service volume of some service industries, such as fast food, banking or health care institutions, are also very direct, so the cost system can be adopted.

The managers of the standard cost center are not responsible for the changes in the level of the business activities of the center, but for those who are

cost

Central capacity

Range

To fulfill the responsibilities required for external decision making.

Efficiency is measured by the amount of input consumed for production.

That is to say, if the full cost method is adopted, the manager will not be responsible for the indirect cost incurred by the amount due to the difference in quantity, but is responsible for controlling the expected indirect costs and the discretionary fixed costs in the center.

Since the price of the product produced by the standard cost center is not determined by the manager of the center, it does not have to be responsible for revenue and profit.

For the products produced by the standard cost center, the efficiency should be evaluated according to the relationship between input and output, and the evaluation of its operation results depends on whether the center has reached the required output in the specified quality and time.